Small Cap Value Report (Tue 28 August 2018) - CSFG, IGR, BVC, SPE

Monday, Aug 27 2018 by
55

Good morning! 

We are now deep in holiday territory. Well done to all of us diehard investors and traders who continue to watch the RNS feed every morning! (Though I'm off to Lanzarote on Saturday, so I won't be watching the announcements for at least a week.)

By the way, there's still a bit of time to vote for Stockopedia in the Shares Awards. We are in categories 15 and 17 - here's the link!

As for today's news:

Cheers

Graham 



Wey Education (LON:WEY) - Leo has written a detailed analysis of this company's recent progress and prospects, so I'm happy to share the link. Here you go.



Joel Greenblatt Interview - wow! It's fair to say that I'm a little bit jealous of Stocko's very own Ben Hobson, who has interviewed Joel Greenblatt in New York. Greenblatt's books and methods are superb and have influenced me for years. Some excellent questions were asked and Joel didn't disappoint.



CSF (LON:CSFG)

  • Share price: 2.1p (-11%)
  • No. of shares: 160 million
  • Market cap: £3 million

Proposed cancellation of trading on AIM

Some years ago, I noticed this was trading at a "cheap" valuation. But it was in Malaysia, and running an unprofitable data centre business. So thankfully, I never got involved. 

A Malaysian company, registered in Jersey, and listed on AIM. I hope nobody put more into this than play money that they could afford to lose. Having a rule to completely avoid all stocks like this has been good for my financial health.

CSF made a big disposal over the past year, so that FY 2018 revenues from continuing operations were just £4.4 million. 

The Board therefore believes that the Group is now of a size where it is no longer practical or cost effective for it to have its Ordinary Shares quoted on AIM.

I agree. Though a reverse takeover or at least the gesture…

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Disclaimer:  

All my own views. I am not regulated by the FSA. No advice.

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CSF Group plc is engaged in the business of design, construction and installation of data centers on an outsourced basis, ongoing support and maintenance and rental of data center space. The Company's segments are Data centre rental; Maintenance, and Design and development of data centre facilities. The Company's data center services include design and development of data centers, including project management, fit-out and integration of the equipment within data center facilities and other computer rooms, and data center tenancy solutions. Its other services include security services, bandwidth and managed data services, and co-location and hosting services. The Company's customers include companies involved in various industries, including banking, insurance, automotive, food and beverage, travel, manufacturing and information technology. more »

LSE Price
2.2p
Change
 
Mkt Cap (£m)
3.5
P/E (fwd)
n/a
Yield (fwd)
n/a

IG Design Group plc, formerly International Greetings plc, is engaged in the design, manufacture and distribution of gift packaging and greetings; stationery and creative play products, and design-led giftware. The Company's geographic segments include UK and Asia; Europe; USA, and Australia. The Company sells its products in over 150,000 stores across approximately 80 countries. It also offers a portfolio of licensed and customer bespoke products suitable for sale through multi channel distribution. The Company's products include crackers, pens and pencils, stickers, single cards and gift wrap. The Company offers its products under the brands A Star, B Stationery, Papercraft and Pepperpot. Its subsidiaries include Artwrap Pty Ltd, International Greetings UK Ltd, International Greetings USA, Inc, International Greetings Asia Ltd, The Huizhou Gift International Greetings Company Limited, Hoomark BV, Anchor International BV and Hoomark S.p.z.o.o. more »

LSE Price
523p
Change
-0.6%
Mkt Cap (£m)
407.5
P/E (fwd)
18.0
Yield (fwd)
1.7

BATM Advanced Communications Ltd. is an Israel-based company engaged in the development, production and marketing of medical products, as well as data communication products. The Company has two operating divisions: Telecommunications and BATM Medical. The Telecommunications division develops and offers telecom network solutions, IP surveillance solutions, software services and Cyber Security solutions. The Telecommunications offers its products to telecom operators in developed markets. BATM Medical is a manufacturer and developer of laboratory diagnostics, including in-vitro diagnostic systems and reagents to detect viral infections, to diagnose immune system diseases and for the measurement of human hormone responses. BATM Medical, which focuses on developing countries in Eastern Europe and Asia, also manufactures sterilizers and medical waste management solutions, and distributes brands of other diagnostic equipment suppliers to emerging market countries. more »

LSE Price
38.25p
Change
-1.7%
Mkt Cap (£m)
154.3
P/E (fwd)
92.1
Yield (fwd)
n/a



  Is LON:CSFG fundamentally strong or weak? Find out More »


20 Comments on this Article show/hide all

MrContrarian 28th Aug 1 of 20
6

My morning smallcap tweet:

CSF (LON:CSFG), Avanti Communications (LON:AVN)

CSF Group (CSFG) Malaysian co proposed delisting, claims it spends £200k PA to be on AIM inc NED fees.
Avanti Communications (AVN) appoints COMSAT as distributor. It gains immediate access to US global governmental and military activity that may otherwise take multiple years to gain approval.

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runthejoules 28th Aug 2 of 20
2

Morning ! Vote for Batm Advanced Communications (LON:BVC) please Graham - lovely chart but as Matylda points out elsewhere, – 41.1p – £165.8m – PER 123.1. Interim Results For 6m To End June 2018 – Revenue up 16.9% to $58.2m (H1 2017: $49.8m), Adjusted Loss reduced to $0.6m (H1 2017: $1.4m loss), Loss Per Share reduced to 0.35¢ (H1 2017: 0.66¢ loss per share) and there’s Cash and financial assets of $23.3m (31 December 2017: $24.0m).

And it's Israeli, and passes a short-selling screen. LOVELY chart though!

Also Sopheon (LON:SPE) - one that got away - unleashes another version of Accolade. Sounds like if I had it maybe I could sort my life out! Cheers!

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Blissgull 28th Aug 3 of 20
6

IG Design, IGR.
Acquisition that will "Deliver significant earnings accretion in each of the next three financial years" and an "in line" trading statement confirming "that trading in the current financial year to date has been strong."

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PeterC1969 28th Aug 4 of 20

Any thoughts on Sylvania Platinum?

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GrowthStocks 28th Aug 5 of 20
3

In reply to post #393894

IG Group - I second this also please Graham, would be interested to know your thoughts on the company. Keeps edging higher & higher.

Many Thanks

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Julianh 28th Aug 6 of 20
3

A third request for IG Design (LON:IGR) if it’s not too big for the SCVR. The CEO and FD gave a super impressive presentation at a recent Sharesoc event. They really seem to know what they are doing. I have held (very happily) for several years.

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Graham Neary 28th Aug 7 of 20
1

In reply to post #393889

Hi rtj..... Batm Advanced Communications (LON:BVC) is on the list, cheers! G

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Graham Neary 28th Aug 8 of 20
1

In reply to post #393939

Yes, I'll have a look at IG Design (LON:IGR). Thanks. G

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andrea34l 28th Aug 9 of 20
8

In reply to post #393899

Peter,

I doubt Sylvania Platinum (LON:SLP) will be covered by Graham as it's a resource stock. However, I think the results look very good, and am a happy holder having bought below 20p. The stock ranks and other metrics look cracking too!

Regards,

Andrea

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nickwild 28th Aug 10 of 20
1

In reply to post #393969


Yes I bought recently at 16p. The metrics seem very good and it is now paying a dividend. Rhodium price continues to rise.

Nick

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Howard Marx 28th Aug 11 of 20
4

In reply to post #393969

Given that the largest end-market for platinum is diesel catalytic converters, where will the overall demand growth for this metal come from?

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Graham Neary 28th Aug 12 of 20
1

In reply to post #393969

Thanks Andrea :)

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runthejoules 28th Aug 13 of 20

Ha ha thanks Graham, back in the too-difficult tray it goes!

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Graham Neary 28th Aug 14 of 20
1

In reply to post #394029

Your suggestion turned out to be a hospital pass! I should've guessed there was a reason we'd never covered it before. Oh well. G

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Beginner 28th Aug 15 of 20
1

In reply to post #393999

Petrol engines also have catalytic converters. Platinum is mixed with rhodium and palladium.

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miti 1000 28th Aug 16 of 20
2

Wrt BATM ,I'm not quite sure what a short selling screen is (is that good or bad) .What does strike me is that BATM was around i the tech boom of 2000 and even though its share price moved from 8p to 40 quid and back again,its still exists. Amazingly, it hasn't raised any money in that time from memory and its CEO has remained the same and retains a big ownership of the company .
A lot of blue sky hope in the ARM tie up it has made and 5g demand for its products but I think its going a lot higher!

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Sk8dad 28th Aug 17 of 20
1

Short selling screen is a filter of stocks which may be considered appropriate for short selling (expectation of going down) and therefore recommended to avoid if holding long. Of course, depends on the success of the screen but these things tend to play out well on average.

I concur with views here regarding Sylvania Platinum (LON:SLP). Stockopedia ranks it highly and it has kept popping up in my screening/analysis. Not a holder yet but looks encouraging.

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davidjhill 28th Aug 18 of 20
5

Batm Advanced Communications (LON:BVC)
It has around 12-13p share in hidden value made up of cash and a 95% stake in an Italian medical diagnostics company valued at circa £41-2m.

operationally geared with cash profit of circa $8m pencilled in for next financial year out to 2020.

Strip out the $80m of hidden b/s value and you get $130m market cap. That's 16* expected cash profit, so not a particularly rich valuation.

Then you have the ARM JDA which, the company anticipates could/should add millions in royalty revenue streams practically all of which would drop to the bottom line and none of which is factored into forecasts.

Throw in their IP leadership in the 5G space and you start to get a feel for both current valuation and also the future potential upside.

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leoleo73 28th Aug 19 of 20
3

Graham,

Thank you for linking to my Wey Education (LON:WEY) writeup.

Indeed it was quiet today, but Beeks Financial Cloud (LON:BKS) full-year results tomorrow might be more interesting. This will be their first substantive update since their H1 results and they are likely widely followed here after presenting at Mello Derby.

They're another speculative microcap trading at around 10x historic sales. As you've probably guessed: I hold :)

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Mikeyflange 29th Aug 20 of 20
2

Anyone needing further understanding of the hidden value and growth potential of BATM should read Simon Thompson’s recent detailed update in the Investors Chronicle. As David Hill mentioned this is a good business that has survived the crunch and has some great technology, patents and Joint ventures. Also take the look in Stockopedia at their institutional holders.
I hold the shares and despite a 60pc rise since purchase will continue to hold as I believe this share has further to go.

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About Graham Neary

Graham Neary

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified, also holding the Investment Management Certificate and the STA Diploma in Technical Analysis.Away from finance, my main interests are recreational poker and everything to do with China, especially Mandarin Chinese. more »

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