Small Cap Value Report (Tue 7 Nov 2017) - TRCS, IGP, FEVR, BLTG, JPR, IDEA, CTP, UPGS

Monday, Nov 06 2017 by
70

Hi, it's Paul here!

This is the placeholder article for Tuesday morning.


Tracsis (LON:TRCS) Interview

Early notice, for Tracsis results which will be published this Weds morning.

As is traditional now, I will be recording an audio interview over the phone with John McArthur, CEO of Tracsis. The interview will be recorded & published this Thu.

So if you have any questions to put to John, then please email them on Weds to both me and John, using these email addresses:

Me:   QSCquestions@gmail.com

CEO of Tracsis:   J.McArthur@tracsis.com

We're trying out this email method, to save me having to spend ages preparing for the interview.


See you in the morning!



Intercede (LON:IGP)

Share price: 34p (down 9.3% today)
No. shares: 50.5m
Market cap: £17.2m

Trading update (profit warning) - this announcement came out yesterday at 1:58 pm. This is most inconvenient, and unfair for investors. It gives city traders an advantage, in that they can sell quickly, before private investors (many of whom will be busy with their day jobs) have a chance to react. All trading updates should come out at 7am. Companies need to ensure that Board meetings (to decide whether to issue a profit warning) are only be held after the market has closed. Then the RNS can go out at 7am. This would comply with the stock exchange rules about issuing bad news without delay.

About this company - the description below sounds quite interesting, but unfortunately its financial performance in recent years has been considerably less impressive than the narrative (see Stockopedia graphical history below);

Intercede is a software and service company specializing in identity, credential management and secure mobility. Its solutions create a foundation of trust between connected people, devices and apps and combine expertise with innovation to provide world-class cybersecurity.

Intercede has been delivering solutions to high profile customers, from the US and UK governments to some of the world's largest corporations, telecommunications providers and information technology firms, for over 20 years.


There was a profit warning in Oct 2016, which I reported on here, concluding that the company was too difficult to value, due to erratic financial performance.


5a01a211ddc4aIntercede_graphs.PNG


Profit warning - the…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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Tracsis plc is a holding company. The Company is engaged in the business of software development and consultancy for the rail industry. Its segments include Rail Technology and Services, and Traffic & Data Services. The Rail Technology and Services segment includes its Software, Consultancy and Remote Condition Monitoring Technology, and also includes Ontrac Limited and Ontrac Technology Limited (together being Ontrac). The Traffic & Data Services segment includes data capture, analysis and interpretation of traffic and pedestrian data to aid with the planning, investment and ultimate operations of a transport environment and it also includes SEP Limited (SEP). It provides software products, consultancy services and delivers customized projects to solve a range of problems within the transport and traffic sector. It specializes in solving a range of data capture, reporting and resource optimization problems along with the provision of a range of associated professional services. more »

LSE Price
555p
Change
-0.9%
Mkt Cap (£m)
157.1
P/E (fwd)
22.4
Yield (fwd)
0.3

Intercede Group plc is a United Kingdom-based software and service company. The Company is engaged in developing and supplying of identity and credential management software. The Company provides MyID software, which is an identity and credential management system that enables organizations to create and assign trusted digital identities to employees, citizens and machines. Its MyID software protects the networks, facilities and intellectual property of governments, agencies and other enterprise customers. In addition, it provides MyTAM, which is a cloud-based service that provides Android application developers and service providers to deploy trusted applications to the trusted execution environment (TEE) on mobile devices. It offers its solutions to various sectors, including aerospace and defense, finance and telecommunications; governments and federal agencies, and mobile developers. The Company operates in the United States and the United Kingdom. more »

LSE Price
30p
Change
 
Mkt Cap (£m)
15.1
P/E (fwd)
n/a
Yield (fwd)
n/a

Fevertree Drinks plc is a United Kingdom-based holding and investment company. The Company is a developer and supplier of premium mixer drinks. The Company's premium mixers consist of a range of all natural carbonated mixers, including Tonics, Ginger Ale, Ginger Beer, Bitter Lemon and Lemonades. The Company sells a range of products under the Fever-Tree brand, which include Indian Tonic Water, Naturally Light Tonic Water, Elderflower Tonic Water, Mediterranean Tonic Water, Ginger Ale, Ginger Beer, Naturally Light Ginger Beer, Bitter Lemon, Sicilian Lemonade, Lemonade, Spring Soda Water and Premium Cola. The Company caters to hotels, restaurants, bars and cafes, as well as supermarkets. The Company sells its products to a range of markets, such as the United Kingdom, Europe and North America. more »

LSE Price
3428p
Change
1.8%
Mkt Cap (£m)
3,960
P/E (fwd)
72.1
Yield (fwd)
0.4



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


29 Comments on this Article show/hide all

DarwenLad 7th Nov '17 10 of 29
2

In reply to post #237543

Remember Boo.com. Its shares slumped from a 50p IPO price in March 2014 to low 20s at end of 2014 when several NEDs started buying shares. UPGS is less than a year old as a public company and, unlike Boo, is paying a healthy dividend which puts its shares on a yield of over 5%. Whoops. Just noticed that the chairman and a NED have invested a very healthy slug this morning. A very good sign. 

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tjl 7th Nov '17 11 of 29
2

In reply to post #237573

The NED chap appears to have invested £375,000 of his pension into UP Global Sourcing Holdings (LON:UPGS). Now that's putting your money where your mouth is!

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FREng 7th Nov '17 12 of 29
5

Paul,
I'd welcome your views on First Derivatives (LON:FDP) which reported today. TechMarketView's report this morning is positive and the outlook statement is positive too. It's currently high momentum (99), High Quality (80) and Low value (7) but has recent broker upgrades. The SP has fallen slightly today.

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leoleo73 7th Nov '17 13 of 29
4

In reply to post #237573

Yes, I remember boo.com, it was a poorly executed fashion dot com era company that was liquidated in 2000 :)

I couldn't understand why Boohoo.Com (LON:BOO) would associate themselves with such a failure by using a similar name and this put me off investing for a while.

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daveinthelakes 7th Nov '17 14 of 29
4

Paul,

Re your comment on Intercede (LON:IGP) - " It's dawning on me that I don't have the expertise to invest in this sector."

I was discussing this very subject with a fellow investor this morning. If I don't understand the industry a company is in then I ignore it but if I believe the sector itself is a serious medium term growth story I will consider investment trusts or ETF's.

I therefore have 2-3% positions in each of-

Cyber Security- ETFS ISE CYBER SECURITY GO UCITS ETF (LON:ISPY)
Robotics- IS AUTO & ROBOTICS UCITS USD ACC ETF (LON:RBTX)
Biotech- Biotech Growth Trust (LON:BIOG) and International Biotechnology Trust (LON:IBT)

This way I cover what I think are potential huge growth areas without taking the risk on individual stocks I cannot properly assess.

Dave

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WhaleHQ 7th Nov '17 15 of 29
3

Fevr have an excellent brand which I think will protect it in bars and social settings, but supermarket competition is certainly mounting. I’ve had a couple of G&Ts over the last few weeks and noticed when buying my supplies from the local Tesco that new brands are emerging on the higher echelons of Tonic shelf. Being a cheapskate, I plumped for a cheaper elderflower alternative and thought it was good stuff. Nothing new I know but having sold my holding a month or so ago I feel like I should jump on the train of doommongery.

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pgs501 7th Nov '17 16 of 29
2

Just to add, Northern Bear Northern Bear (LON:NTBR) have issued a trading update (seemingly in the middle of tha day unless investegate have been really slow on my alerts). On the plus side it seems positive to me and we have the all important exceeded expectations.

As Paul always says it would be good if they could quantify this with what the expectations were, and what they are now. The only number they actually compare to is last year, saying they beat them and reiterating that this is a tough hurdle to beat.

But an update issued within trading hours that is vague is something that surely could have been handled better. If they had to issue it in trading hours due to a leak say so.

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RichardK 7th Nov '17 17 of 29

In reply to post #237648

Thank you for the alert, pgs501. I have bought some more Northern Bear. Like you, I am perplexed as to why the update should be issued at 2.45 pm.

Richard

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herbie47 7th Nov '17 18 of 29
11

In reply to post #237663

There was an announcement scheduled today for the Half Year results, maybe it was not ready so they put out a trading statement instead? I agree it's rather bad form.

I think we should switch to the US system, these announcement should be made after market close rather than at 7am, then people have more time to study them before the market opens.

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steviej 7th Nov '17 19 of 29

In reply to post #237668

Agreed

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clarea 7th Nov '17 20 of 29

In reply to post #237533

Cheers Paul your way ahead of me but all ways do a highlighted scan for the dreaded word "adjustments" when looking over results

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pastysupper 7th Nov '17 21 of 29
3

In reply to post #237668

But that would be too fair, and eradicate the occasional advantage of early risers like me :)

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Aislabie 7th Nov '17 22 of 29
1

In reply to post #237663

Northern Bear (LON:NTBR) give the impression of being a bit clueless about how to deal with the market, maybe their 49% float insulates them from having to talk about themselves.
They do not appear to ever make any presentations maybe because in Newcastle they feel too distant to bother. I think it is basically a good company but they could do with telling people about themselves and their PR company and broker need to get a sharp poke in the ribs.

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Roger Lawson 7th Nov '17 23 of 29

Agree with your comments on Blancco and Intercede. Former accounts too complicated so uninvestable until the picture is a lot clearer. Intercede, and its Exec Chairman Richard Parris, I know well from some years ago. Needs a change of management in my opinion. Commented on both those and Johnston Press also on my blog here: https://roliscon.blog/2017/11/07/johnston-press-blancco-technology-and-intercede/

Website: Roliscon
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Paul Scott 8th Nov '17 24 of 29

In reply to post #237588

Hi FREng,

Sorry, I don't cover First Derivatives (LON:FDP) - it's too big (nearly £900m mkt cap).

Looking quickly at the StockReport, it looks extremely expensive, on a fwd PER of 50.

Historic profit growth looks good, but not spectacular. 

There must be expectations of strong future growth. It isn't the sort of thing that would interest me.

Regards, Paul.

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FREng 8th Nov '17 25 of 29
1

In reply to post #237858

Paul

Thanks for the quick look at First Derivatives (LON:FDP)

FREng

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tic_tac_toe 8th Nov '17 26 of 29
2

wow, what an epic SCVR write-up! great effort, Paul!

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JohnEustace 8th Nov '17 27 of 29
2

Re UP Global Sourcing Holdings (LON:UPGS), if retailers buy direct from China that options comes with costs too. There's a lot of work and travel and expense in finding the right factories and maintaining the relationships. It's not easy to do from 6,000 miles away so once you get to scale you need your own Chinese speaking people on the ground. And you'll need to pay for independent Quality Assurance people. You can get the quality you need in China but it takes effort. When people look at retailers they see the store fronts, but the supply chains they draw on are at least as critical.

Buying from UP Global Sourcing Holdings (LON:UPGS) is basically outsourcing that work and expense.

There's an entertaining book on Amazon called Poorly Made In China. It's a bit out of date but a cautionary tale nonetheless for anyone thinking of buying direct.

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Trident 8th Nov '17 28 of 29

Tempted by a punt on UP Global Sourcing Holdings (LON:UPGS). Unusual to see such large share purchases by non-execs. I guess the execs are happy with their option awards, rather than purchasing in the market? The dividend yield looks like it will provide some temporary comfort, but the spread on the shares may take away my enthusiasm.

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Paul Scott 8th Nov '17 29 of 29
2

In reply to post #237878

Hi John,

Yes, you're absolutely right about the difficulties of direct sourcing from the Far East.
Your comments triggered my memories in the 1990s of the rag trade. We tried direct importing, from India mainly. It was a total nightmare! We had to pay up-front for the goods, which caused cashflow problems. Then wait weeks for them to arrive by ship. Then of course all the hassle & paperwork of customs clearance (who had to handle all that - muggins here! None of the buyers had a clue, so they just dumped it on me!! I didn't have a clue either, so had to learn quickly). When the goods finally arrive at our warehouse, the quality & fit was usually all wrong, but there was nothing we could do, as it was all paid for. The factory didn't want to know.

So we went back to using small UK companies, that handled all the importing for us, and gave us 90 days credit. In return for their 20-30% markup.

I do quite like UP Global Sourcing Holdings (LON:UPGS) actually, the more I think about it. Might add it to my watchlist.

Regards, Paul.

P.S. The Chairman splashing out £102k buying shares at 93.25p yesterday, plus a NED spending £375k on shares at the same price, is a very good indicator in my view. That's not a PR stunt, it's a significant vote of confidence in the company.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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