Good morning! It's Jack & Roland here with the SCVR for Tuesday.
Agenda -
Jack's section:
Treatt (LON:TET) - strong results and resilient performance from a proven quality operator. Ongoing investment for future growth, with increasingly high margin and diversified revenue. The company could continue to do very well in the long term, but for now the valuation remains full so it stays on the watchlist.
System1 (LON:SYS1) - I hold - very illiquid micro cap, hard to sell out once you buy in. But there is an intriguing growth story here, shifting away from bespoke one-off consultancy contracts to a far more scalable suite of data products for advertisers. If the strategy works out, then the growing proprietary database could become a moat and System1 could become quite valuable. The small size and lack of liquidity mean it's not suitable for everyone though.
Hornby (LON:HRN) - owns brands like Airfix and Scalextric, which could have value if the company continues along its current course of investment in people and tooling. Supply chain disruption is obscuring signs of progress but the order book is up 35%. I still think a valuation of £65m does not fully reflect the risks here though.
Roland's section:
Topps Tiles (LON:TPT) - a solid set of results which take trading back to pre-pandemic levels. The stock also offers a useful 5% dividend yield. However, the outlook sounds cautious and I feel that growth potential over the next few years could be limited.
Vp (LON:VP.) - I’m impressed by today’s numbers and the underlying business, which shows some real hallmarks of quality in my view. Market conditions appear somewhat mixed, but VP’s experience management seems to be executing well. A 25% increase to the interim dividend will reward patient long-term shareholders.
Explanatory notes -
A quick reminder that we don’t recommend any stocks. We aim to review trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty. We are analysing the company fundamentals, not trying to predict market sentiment.
We stick to companies that have issued…
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