Small Cap Value Report (Weds 1 Mar 2017) - RBG, EHG, MYSL, VTU, DX.

Wednesday, Mar 01 2017 by
44

Good morning!

We did 2 reports yesterday, in case you missed them, as follows;

My report covered Revolution Bars (RBG) interim results, and BooHoo (BOO) trading update. I know BOO is a mid cap now, but as it's so popular with readers, I'm continuing to cover it.

Graham's report covered: Waterman (WTM) interim results, Redde (REDD) interim results, Avanti Communications (AVN) interim results, and Swallowfield (SWL) interim results.

Sorry we didn't get round to mentioning JSG & AVN.


New Stockopedia Charts

The big launch yesterday went well. Have you tried out the new Stockopedia charting package? They're terrific I think - a massive improvement on the old charts.

You can access the new charts for any company just by clicking in the usual place (the "Chart" tab, in between "News" and "Discuss", just below the share price) in that company's StockReport.

Or, another way to access the new charts, is via the "Tools" button on the main black menu. There's a shiny orange star next to it, just to help us find our way.

Here's a comprehensive guide to the new charts, which I will read later. I haven't quite managed to grasp one or two of the features yet.



Revolution Bars (LON:RBG) (at the time of writing, I hold a long position in this share) - just a couple of extra points to add to yesterday's large section on this share.

Interim results presentation - the company, very helpfully, posts the slides which it shows to institutions & analysts onto its website, so that the hoi polloi like us can also see them.

This company's presentation slides are here, then click on "Interim results presentation FY17".

I had a look through these slides last night. This only reinforces my conviction that this share is simply the wrong price, with a good 50%+ upside on it. As always, I may be right or wrong, that's just my personal opinion, not a recommendation - the emphasis is always on people to do your own research, and take responsibility for your own investing decisions. I do my best, but am not infallible by any means - and covering so many stocks, inevitably I do sometimes miss things.

A fund manager friend has kindly booked me in to a results presentation with RBG management today, so I have to finish this report early, in…

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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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Revolution Bars Group plc is a United Kingdom-based operator of bars. The Company has a trading portfolio of approximately 60 bars located predominantly in town or city high streets, which operate under the Revolution and Revolucion de Cuba brands. The Company's bars focus on a drinks and food-led offering, and typically trade from late morning, during the day and into late evening. Revolucion de Cuba bars are characterized by their 1940s Cuban-inspired style, with dark woods, traditional bar counters, antique tiles, vintage furniture, Havana-style ceiling fans, and original Cuban artwork and photographs. Its bars are located in various places, such as Cambridge, Ipswich and Norwich in South East; Bath, Plymouth and Southampton in South West; Birmingham, Derby, Leicester, Loughborough and Milton Keynes in Midlands; Cardiff and Swansea in Wales; Blackpool, Chester and Huddersfield in North West; Sheffield, Sunderland and York in North East, and Edinburgh and Glasgow in Scotland. more »

LSE Price
68.8p
Change
 
Mkt Cap (£m)
34.4
P/E (fwd)
9.8
Yield (fwd)
7.6

Elegant Hotels Group plc is a holding company. The principal activity of the Company and its subsidiaries is the ownership and operation of hotels and restaurants on the island of Barbados. It owns and operates six freehold beachfront hotels and a beachfront restaurant in Barbados. Its hotels include Colony Club, Tamarind, The House, Crystal Cove, Turtle Beach and Waves. It operates Daphne's restaurant, which is located on platinum West Coast in Paynes Bay, adjacent to The House and Tamarind in Barbados. Its Colony Club hotel is spread across six acres of tropical gardens with approximately 300 feet of beach frontage on the Caribbean Sea and lagoon style pools. Its Tamarind hotel is on the Platinum Coast. Its Crystal Cove hotel has three freshwater lagoon pools, two restaurants, two bars, two floodlit tennis courts and a fitness center. Its Turtle Beach property is on the south coast of Barbados. Its portfolio consists of over 550 rooms. more »

LSE Price
71p
Change
 
Mkt Cap (£m)
63.1
P/E (fwd)
7.0
Yield (fwd)
5.0

MySale Group plc is engaged in operating online shopping outlets for consumer goods, such as women, men and children's fashion clothing, accessories, beauty and homeware items. The Company's segments include Australia and New Zealand, South-East Asia and Rest of the world. It operates with flash sales Websites in Australia and New Zealand (ANZ), South-East Asia (SEA) and the United Kingdom. Its Websites host time limited flash sales in each of its territories. These flash sales are focused on fashion, apparel, health, beauty and homeware categories and are undertaken on a consignment inventory basis. Its retail Websites also focuses on these product categories using drop-shipped inventory. Its flash sales brands include OzSale and BuyInvite in Australia, NzSale in New Zealand, SingSale in Singapore, and MySale in Australia, New Zealand, Malaysia, Thailand, the Philippines, the United Kingdom and Hong Kong. more »

LSE Price
7.35p
Change
 
Mkt Cap (£m)
11.3
P/E (fwd)
7.0
Yield (fwd)
n/a



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


18 Comments on this Article show/hide all

Julianh 1st Mar '17 1 of 18
2

Paul or Graham
I'd be interested in your thoughts on the Empressaria results published today. The market's instant reaction has been to mark the shares up by more than 9%. But while "adjusted" EPS has grown substantially basic diluted EPS is unchanged.
Does the adjusted EPS reflect reality? Or is this another smoke and mirrors trick to boost the share price and the directors bonuses? Your thoughts and analysis would be most welcome.
And again many thanks to both of you. The Small Cap Value Report is essential daily reading. I learn a lot, my investment process improves and my investment returns are improving too.

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buyhard 1st Mar '17 2 of 18

I'd like to see Graham's or Paul's thought on the results from Costain (COST) today if at all possible.

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purpleski 1st Mar '17 3 of 18

Morning

Anybody who reads Pauls reports know what is going on with Purplebricks (LON:PURP), which as far as I can tell is up 25% in a couple of hours (about 15% in the final hours of trading last night and around 8%/9% this morning). I hold and up 105% in 10 weeks and it is now 7.5% of portfolio.

Thanks Paul for your links to £RGG slides which I will study later.

Michael

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rouleur1 1st Mar '17 4 of 18

At the time of writing Purplebricks (LON:PURP) has calmed down a bit, but it's been very lively the last couple of days. Can I add a voice asking Paul or others for some views?

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Julianh 1st Mar '17 5 of 18

In reply to post #173600

Re: Purplebricks
In response to a couple of questions above.
On 22 February PurpleBricks raised £50m in a placing. It will use the funds to launch in a few key states in the USA. The information provided suggested that the USA is a huge market and because the market is so fragmented and agents charge such high fees it is a huge opportunity for PurpleBricks. The placing was completed successfully at only a 0.6% discount to the market price on the day so no dilution to existing shareholders.
It looks as if the jump in the share price is a positive response to the opportunity.
Hope that helps

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dahokolomoki 1st Mar '17 7 of 18
2

Re Purplebricks (LON:PURP), I'm skeptical if they could crack the US market. Surely, the land of startups and Silicon valley, there are already several established online estate agents? And well funded?

If Purplebricks (LON:PURP) goes in, it will turn out to be a marketing spend war against the existing players, who are likely to be well funded themselves by (private) VCs who don't have to report half yearly earnings and take a longer-term view.

Think how Uber splashes the cash around and runs out huge losses to keep its dominant entrenched position (and thus making life difficult for smaller Lyft and other players) and you can bet that some of the founders of existing online estate agents in the US will be thinking the same tactics to defend their turf and go for winner-takes-all glory.

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paraic84 1st Mar '17 8 of 18
4

In reply to post #173651

Take a look at rouleur's link. There actually isn't as much competition as you might think and what there is seems to be some sort of company doing payment solutions in different industries rather than something targeted on estate agency. The main issue I am worried about is there isn't a RightMove equivalent in the States, just some smaller equivalents, which might make it harder to drive traffic to Purplebricks (LON:PURP).

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paraic84 1st Mar '17 9 of 18
2

On MySale (LON:MYSL) I was expecting slightly higher profitability this morning which is a shame - the move to their own-buy stock is a bit slower than I would like.

They also seem to have less marketing presence in the UK, at least in newspapers and tube posters, compared with BrandAlley. I'd like to better understand the potential market too to estimate potential market cap.

Oddly they seem to have made no mention in any of their RNS's about diversifying into their own products. This has been reported by the press so I don't understand why it has not been referred to. This is the website of their own brand launched last autumn: https://www.londonchic.co.uk/ It seems to have minimal products and the website is not very easy to navigate - so maybe they are giving up already?? It only has 47 likes on Facebook UK and their Oz website has no clothes at all!

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Leven 1st Mar '17 10 of 18
2

Also Purplebricks (LON:PURP) is very tightly held (Woodford and founders own c. 50% and i doubt they're selling). The placing shares don't settle for a couple of weeks, hence the big spread at times and large swings in price.

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Graham Ford 1st Mar '17 11 of 18
1

In reply to post #173678

I think your comment about a possible problem in there being no equivalent of Rightmove may be spot on.

To sell your house prospective buyers need to know it is on the market. In the UK Rightmove and Zoopla have such a dominant presence that Purplebricks doesn't need to have high visibility itself - just put the property on one of those and the buyers will find it. (Before those listing sites existed the visibility of the high street agents's office and local newspaper advertising were key, because that's where buyers went to find the properties). 

So, I just hope that one of the key criteria that Purplebricks are using when choosing the states/locations to go into is the presence of a highly successful on-line site where the majority of local properties are listed.

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Chris123 1st Mar '17 12 of 18

Does anyone have a view on the announcement from Low & Bonar (LWB) this morning?
'Low & Bonar announces that it has mutually and amicably agreed with Mike Holt, Chief Financial Officer, that he will step down from the Board and leave the Company once a successor is appointed'

I was close to taking a position in LWB, but this has made me take a step back. It seems a rather sudden and unplanned departure, which can be a warning sign...

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doublelutz 1st Mar '17 13 of 18
1

A comment from my son who lived in the US for a few years.

"People like their real estate agents in America. They become trusted friends. They find the properties to view and offer support and advice. I'm not sure there is the appetite for change even if savings can be made.

Many in the US (unlike in the UK) are willing to pay for good service. Just think of the tips people happily pay servers in restaurants. Some give 20% or even 25%. I think real estate agents in the US are considered to be worth their money even if to us their charges appear ridiculous".

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Samsgrandad 2nd Mar '17 14 of 18

Estate agent and trusted in the same sentence. Not often you see that. Must be different in the US.

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rosered 2nd Mar '17 15 of 18
1

I don't trust TripAdvisor as I find that many comments clash with my own though I do use it as a starting point for research into restaurants and hotels. There is nothing like doing one's own due diligence. Which is why I am sitting in the warm sun in the Tamarind Hotel overlooking the Caribbean. Two comments. I see evidence of constant refurbishment and this hotel is not tired. Secondly the customers seem to be mostly retired and the sort which appears to like their cocktails, fuss and food so perhaps not too price sensitive.

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jonno 27th Mar '17 16 of 18

I read a recent article in the FT that American hoteliers were suffering due to a reduction in demand as visitor numbers to the USA had fallen due to the unpopularity of Donald Trump, which is understandable. I wonder whether Elegant Hotels might be a beneficiary?

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jonthetourist 4th Apr '17 17 of 18
6

Re RBG, I spoke to my niece tonight. 25, living and working in Harrogate. Me: Is there a new bar in H'gate called Revolution de Cuba? Her: Yes, apparently it's ace - going to be *the* place to go in town. Me: Do you see yourself spending a lot of money there? Her: Yes, if I had any (she is doing up a house).

Reassuring. I hold.

Jon

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Flackwell 5th Apr '17 18 of 18
1

Jon - do the decent thing mate and send your niece some money for her birthday - on one proviso

;)

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 Are LON:RBG's fundamentals sound as an investment? Find out More »



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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