Small Cap Value Report (Tue 8 June 2021) - NGHT, IGP, PCIP, OTMP, WATR, AMO

8th Jun '21 by Paul Scott

42 comments 10769 reads

Good morning, it's Paul & Jack here with the SCVR for Tuesday.

Timing - I'm (Paul) running a bit late today, so am planning on working on this until mid-afternoon.
Update at 16:32 - today's report is now finished.

Agenda -

Paul's Section:

I'm trying out a new idea - posting quick comments in the comments section below, to give an initial pre-8am view on stocks most of interest to me. I'll gauge reader interest in this by the number of thumbs ups to those comments. Full sections on those shares will follow later this morning.

Nightcap (LON:NGHT) - strikingly good trading (+53%) using 2019 comparatives, on a like-for-like basis. Surprisingly strong, for this mainly London based small bars group. Shares look way over-valued, but this strong re-opening trading (still with covid restrictions remember) augurs well for Revolution Bars (LON:RBG) (I hold)

Intercede (LON:IGP) (I hold) - good results, with a decent increase in profits, despite covid disruption. Balance sheet is transformed, with debt converted into equity, and an £8.0m cash pile. Lots of interesting commentary provided in the RNS. I have high hopes for this company, as a long-term position.

Pci- Pal (LON:PCIP) - a strong end to the year, guidance is raised, 5% better than expectations on both revenues & loss. Superb organic growth (+60%), but still loss-making. I like it, as growth this strong is hard to find, and only takes a few years to transform the P&L.

Onthemarket (LON:OTMP) (I hold) - it's announced a maiden profit today, despite headwinds from covid. No longer a basket case, this challenger property portal is starting to look viable, but obviously way behind Rightmove. Big upside if the (admittedly low probability) breakthrough does occur. Cash position is fine too.

Jack's Section:

Water Intelligence (LON:WATR) - detailed update on FY20 and the subsequent trading period through to 30 April 2021; excellent current momentum and a significant global opportunity, although the high rating might put some off.

Amino Technologies (LON:AMO) - H1 revenue growth of 19% looks to be better than the recent norm and the group is investing for future growth, so this could justify a little more research.

Paul’s Section

Nightcap (LON:NGHT)

27p (up 17%, at 08:25) - mkt cap £44m

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BrileyLoucan

8th Jun '21

Hi Paul,

Love reading your daily report. On the proposed change, would much rather you put your flash view at the top of the report. I always read the report but often only skim the comments later in the day; I don't want to miss what you say as they are embedded in the comments.

Just my opinion - others may feel differently.

Thanks

Fishcake

Personally I value Paul's in-depth analysis of company reports, where he flags things that I'd miss. I really like the recent one-line summary at the top of each report. However, I'm not sure that the 'flash view' adds much - as we're devotees of DYOR we can all form a quick view on something, what we need is the reasoned and thought out view.

Brookeda

I have been an holder for a few years and its very much a steady as you go company. To reduce the discount there needs to be a sale or two of some of the larger investments. Nexus (their largest investment) has been muted for a potential IPO for at least 2 years, until then I think its going to always look cheap. Something for my cookie jar though

JohnEustace

I agree that the flash views are better at the top of the report

cwatson

Tinybuild Inc (LON:TBLD) looks really interesting, posting some strong growth numbers this morning. exciting sector which i would like exposure to but the market cap worries me - c£530m for a company with revenue of c£26m? seems like the price has got ahead of itself. Or does this sector demand the higher multiples?

kenobi

I wouldn't put too much weight on a 53% lfl figure over a 3 week period. It's a cocktail bar high end chain, and is it surprising if punters that might go there from time to time as a treat rush back there, when they've been unable to go out for months ? On the valuation side, sure it looks widely over valued on a pe of 45 +, but isn't that typical of high end fashionable things that seem to have hit on a winning formula ?? Steer clear in my view, RBG (I hold too), might be better value, but they seem to have given away the majority of the upside with poorly executed share issues, it remains to be seen how wisely that money will be invested in new sites, and what return shareholders will get on it. Worth remembering they've lost 90% of their value since the management turned down a take over offer. (I appreciate not the same management), Hoping for better days ahead for them though, although the upside is surely limited from here. Wish I'd sold before the latest share issue obviously

Harry Hindsight

Saga (LON:SAGA) - alert popped up and breaking recent high with volume so maybe starting to sail.

Doesn't look like flying is on the cards this year so why not a nice cruise around the coast, to the med or around Norways fijords. Probably fully booked though.

Will S

Personally, I like the little flash comments. And I really liked yesterday's share ideas section. Please keep experimenting!

sharw

Jack - thanks for your comments on Amino Technologies (LON:AMO) (my second largest holding!).

I have ben impressed by their culture regarding acquisitions where key talent are retained. The people leading 24i are still there and Thomas Christensen, CEO of Nordija will become 24i CTO.

finnCap have a target price of 215p. Andrew Darley, analyst there, is aware that understanding the technical background of such companies can be off-putting for investors and so has been producing some helpful videos. Here is the one for Amino Technologies (LON:AMO) (if you can cope with the speed of talking by Martijn van Horssen, Co-CEO & Founder, 24i ):

https://www.youtube.com/watch?v=rlIp32Ev4VA

Paul Hampson

Re: flash comments.

I usually read the comments early in the day just to catch Mr Contrarian's summary. And so the option of voting on different companies to show what would be most useful to subscribers seems a useful idea.

Although I notice today there wasn't a lot between the votes for the 3 companies mentioned!

Jack Brumby

Cheers sharw, videos are such a help when you're getting to know a stock. Will check them out later today.

Boon

The Europe cruises with port stops, planned for Aug onwards, will still require those port countries to go o to green list, otherwise a nasty amber list quarantine and extra tests on return to the UK. With the more cautious govt stance on traffic lights last week, the outlook for those cruises are now dimmer, although still far out enough to still have good hope.

Effortless Cool

Dowgate and WH Ireland have issued broker notes on Water Intelligence (LON:WATR) [I hold] this morning reflecting the 2020 year-end results and the trading statement to end-April 2021.

In both cases, they have kept their 2021 forecasts unchanged but introduced their initial forecasts for 2022. After 47% revenue growth in the first four months of this year, the consensus revenue figure for 2021 of $45.5m implies just 10% revenue growth over the next eight months. This is, frankly, rather silly and, in my opinion, further material upgrades to 2021 revenue are inevitable over the course of the rest of this year. I would expect these to have a knock-on effect to 2022 revenue forecasts too (current consensus $49.8m).

My own forecast for 2021 revenue prior to today's update was $47.3m, and I expect to push that up once I get time to work through the numbers.

Gostevie

Re B.P. Marsh & Partners (LON:BPM)

Almost certainly irrelevant, but I can't help myself. I'm a friendly guy and get on with most people, but I met Brian Marsh on a few occasions during my professional career, and can only say that if I were to post what I thought about him as a person I would almost certainly and rightly be banned from Stockopedia for life.

Bargepole job for me, although long-term holders seem to have done well enough.

Depends on what you witnessed but I would say most successful leaders have a side to them that doesn't make them particularly popular. Question is from what you saw would it make you question his ability to pick good investments and help them grow?

ezlifeme

Much agrees dahokolomoki - re Saga (LON:SAGA)

Further more the UK Gov advice on booking and travelling on a cruise is still. DON'T

https://www.gov.uk/guidance/cr...

The main part of the website is also VERY CLEAR on ALL Travel https://www.gov.uk/guidance/tr...

We continue to advise against all non-essential international travel to some countries and territories

The COVID-19 pandemic continues to affect international travel. No travel is risk-free, and many countries have closed their borders or restricted entry to UK travellers. Any country may further restrict travel or bring in new rules at short notice, for example due to a new COVID-19 variant.

Risky Travel has economic risk as well as personal - ask anyone who took that risk to "pop to Portugal". A Green light isn't a green light to NO RISK. - Just reduced restrictions (at the time)

It will be a long cold summer in the travel industry

rmillaree

B.P. Marsh & Partners (LON:BPM)

I have a decent holding of these and have been a happy holder so far , price hasn't set the world alight but i get the impression that the management here are a very safe pair of hands - as Brookeda has mentioned i suspect we need to wait for the rare bonanza to appear where the value can be unlocked by flotation or sale to third party. I am happy to continue to hold and the diso#### makes the company look as good value as ever at face value - it is a bit "black box type" investment though so probably won't be for most and the performace of their largest value entitties does materially matter so any underpeformance in their laregr holdings could cause issue with shareprice.

Ref your comments about Mr Marsh i would be very interested to here generally speaking what the issue is with his approach as you see it - if its just not being helpful to investors i can live with that - i kinda guess that this company is solely concentrating on their core job of managing investments in best manner - some company bosses give lip service to shareholders and the market in general ref pr and the like - i for one think the company announcements always speak for themselves and have never really left me wanting for more.

Bouden54

Interesting, although I'd imagine he must be pretty close to retirement now and will surely step aside before too long? Of course some worry about key man risk, but they seem to have a good team in place. More importantly, I would expect the underlying companies to continue to perform well irrespective of Brian's involvement, so personally not too concerned about that issue. Listing of Nexus (which is seeing very strong growth and from memory about 40%of the fund) could be catalyst to drive a re-rating.

Wimbledonsprinter

I know it is ancient history but it was the shareholders who voted down the 203p bid for Revolution Bars (LON:RBG) in 2017 from Stonegate. The BoD unanimously recommended the bid.

GloucesterBob

Ref Saga (LON:SAGA)

Well something is moving the share price along quite nicely.

Is quarantine such a big issue for the average SAGA traveller who's probably retired anyway?

Edit: Found this

https://travelweekly.co.uk/new...

Small Cap Value Report (Tue 8 June 2021) - NGHT, IGP, PCIP, OTMP, WATR, AMO

Paul’s Section

Nightcap (LON:NGHT)

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Paul Scott

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