Small Cap Value Report (Weds 4 August 2021) - MMH, NSH, SEEN, SEE

4th Aug '21 by Jack Brumby

47 comments 8050 reads

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

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to cover 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 stick to companies that have issued news on the day, with market caps up to about £700m. We avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech).

A key assumption is that readers DYOR (do your own research) - don't blame us if you buy something that doesn't work out. Reader comments are welcomed - please be civil, rational, and include the company name/ticker, otherwise people won't necessarily know what company you are referring to.

Agenda -

Paul's section:

Seeen (LON:SEEN) - speculative, loss-making social media tech platform. Water Intelligence (LON:WATR) and its chairman Patrick De Souza are major shareholders. Not for me.

Seeing Machines (LON:SEE) - it's been a long road to successfully commercialising the technology here but progress has been made and the share price has duly rerated. Revenues are forecast to increase, but losses are also set to continue, making this tricky to value.

Jack's section:

Marshall Motor Holdings (LON:MMH) - car dealer momentum continues and Marshall FY PBT guidance is up from 'not less than £22.1m' to 'not less than £40m'. Impressive given the share price, and the strong trading continues, but the group does flag high levels of uncertainty and an expected realignment of used vehicle values.

Norish (LON:NSH) - micro cap temperature controlled logistics provider investing in a small Dairy division. There are some signs of margin improvement and growth opportunities here, but the stock is illiquid and that might automatically rule it out for a lot of investors.

Paul’s Section

Seeen (LON:SEEN)

43.5p (unchanged today, at 10:07) - mkt cap £22m

This one’s very small and illiquid, and I’ve already decided that I wouldn’t touch it (heavily loss-making, low gross margin, cash burning), but will type up a…

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donald pond

4th Aug '21

I've had business experience north of the border where utilities refused point blank to carry out their statutory duties on the basis of what someone's family did to someone else generations ago. So I don't think your experience is unusual.

Joe Turner

Agreed. My Dad's experience of selling to customers in the North was even fruitier than his dealings in the South !

Dave Griffiths

I'm also a long time user of Charles Stanley (LON:CAY), since Torrie & Co. !

I'm watching any change in fees closely...........

raggedtp

And I am a gold member (whatever that means) of CS Telephone Execution Only Services. Have been for years. I really think this is the best way for serious PIs. Be wary of 'fee-free' services. I just think it's easier to get better prices if you can talk to someone. With this service you are direct to the dealers, who will 'work' orders for me through the day to buy inside the spreads, advise on market depth etc. No 'wealth management advice', and not free, but if you know what you're looking for and do trade a few times every half-year, the fees are reasonable and the holding costs negligible. My current dealing contacts there seem happy with the takeover, but if I see a reason to leave CS, I'll let the Stocko community know.

Trident

Total generalisation from me. When you enter certain marketplaces you will be seen as a target for being ripped off. As a non-native you are seen sometimes seen as fair game, or you come with a cultural baggage you may not even be personally aware of, that makes taking advantage less of an issue.

To some extent this happened in the UK in history when wealthy Americans came over here. Maybe in modern Ireland its becoming less of an issue but I still divide by two when I hear a Company proselytizing their product or service in a Southern Irish accent. Was bitten in early commercial life by someone who turned out to be less than they made themselves out to be.

Chris1011

Thanks for your responses.

Paul/Jack/Stockopedia - I would appreciate if you had a view in regards to this thread, please? Is it Stocko not pulling and updating the most up to date info or, Brokers not providing this to Stocko - take Deepverge (LON:DVRG) / TPI as a good example?

Chris

cmpeckham

"... are the US markets overvalued? Many seem to think that they must be and are on the verge of a reversal"

I often see people here talking about markets being overvalued, so they start selling or shorting on a short term basis. I would just point out again that there is absolutely no relationship in the historical data between valuation and short term market returns. Long term (10 year) returns - yes, short term returns - no.

Anyone looking for an evidence-based reason for a short term correction could point to rising inflation, or the fact that the period from August to October has given the worst returns of any quarter, but history says that valuation is irrelevant.

TamzinPiworld

PIWORLD interview with Creightons (LON:CRL) to hear the background and rationale to the Emma Hardie acquisiton announced last week, covering the plans to integrate and develop the brands. Video & podcast. A must watch if you hold.

Efecx1888

Maybe the issue began with the inability to get the country name you were dealing with correct. I can only assume the 'Southern Irish' and 'The South' you are referring to is the Republic of Ireland, which contains areas further north than Northern Ireland btw

bohenie

Hi Wilbraham -Thanks to you and all others for the comments - I share your concerns in particular - anyway - no rush to move - lets wait and see!

Db47

aagh ok my apologies herbie47 - will give that a go :-)

gus 1065

Re. the possible impact of the Charles Stanley (LON:CAY) takeover by Raymond James, here is a link to Raymond James’ current U.K. operation‘s fees and charges page.

https://www.raymondjames.uk.co....

Clearly seem to be targeting investors who prefer to pass responsibility over to intermediary wealth managers so not immediately obvious that the CS Direct execution only services will fit their existing modus operandi. RJ‘s current £27 basic commission per trade (rising for overseas and more complex orders) and a flat 0.50% per annum custody charge on account holdings would render them prohibitively expensive for me.

Gus.

Frontrunner72

Me too Gus...

mark1308

No abuse from me ! because I dont knowingly buy Chinese firms as so many frauds over the years ! I am also wary of companies from Israel too sometimes for a similar reason. It never hurts to be over careful as its your money on the line. Take care.

Some believe you should always be 100% invested ! or thereabouts - its time in the market not timing the market. Discuss.

betjeman

Apologies for rising to the provocation…….Shocking generalisations……….as somebody with a southern Irish accent who spent 30 years working in the city I have never heard such h-orse Sh-t…..,…I presume you will do the same for BP, HSBC, Tesco’s , SmurfittKappa, DCC, CRH all of whom have Chairman/CEO’s with a dreaded southern Irish accent

James Kerr1

Didn't you know, we're all crooked bog-trotters? Yup, 'ignorant prejudice' is still alive and well in England. Who knew?

bryans1311

As someone in Northern Ireland that visits both GB and ROI regularly, I can tell you the prejudice from the Southern Irish towards the English is a heck of a lot worse than the other way around. Your comment being a prime example.

Thankfully after 600 years of difficult history, most of us, on both sides of the pond,/border have managed to move on, but I'm quite comfortable having a poke at the lazy stereotyping of the original post. That said, this discussion has no direct impact on any of the shares under discussion today, so I'm going to shut up.

Wilbraham

Thanks gus - not to mention the 'negative interest rate' charges they apply to certain non-GBP account balances!

I think I'll start to divest my less liquid CSD holdings fairly soon. Partly in the expectation that they'll agree a low cost transfer option to another on-line broker in due course (which happened to me when Options Direct/FXCM decided to ditch their UK clients some years ago) which will necessarily mean being unable to trade for a significant transition period. I don't know if CSD have dedicated staff, or simply use staff employed in the broader CS asset management business. If the former, we should watch for a reduction in service levels if said staff jump ship.

All rather a pity - I've effectively been with CSD since they acquired the delightfully-named Nothing Ventured SIPP business shortly after the dot.com burst.

The one take away from this to my mind is that no broker can ever be 'for life'.

Small Cap Value Report (Weds 4 August 2021) - MMH, NSH, SEEN, SEE

Paul’s Section

Seeen (LON:SEEN)

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Jack Brumby

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