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Archived articleThis is an archived article from 2021 - please note that any content within the article may be out of date.

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

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 brief note just so we have something in the system to refer back to if it crops up again.

Results for FY 12/2020 show a big jump in revenues to $10.1m up 136% (note US dollar reporting). However the gross profit is only $1.1m, a margin of just under 11% - hopeless!

Then we have massive overheads, totalling $5.0m. This includes $618k in share based payments. Why?! How is it OK to reward Directors for producing such lamentable numbers? That seems crazy to me. I do wonder sometimes who really benefits from the existence of many listed companies, especially the blue sky ones like this. Still, the share price has doubled in the last year, so shareholders are probably quite satisfied about that.

Profit after tax came out at $(3.6)m. I use PAT for tech companies that receive tax credits, as that’s a bona fide source of income (for R&D tax credits, etc).

The balance sheet looks OK for now, with a $5.3m cash pile, but what stands out is that cash fell by $4.4m in FY 12/2020, so if 2021 burns cash at the same rate, then the cupboard will be almost empty by the end of this year (not long now), so expect a placing in 2021 or 2022, and it’s anyone’s guess what terms that will be on. Could be highly dilutive, if investors are not keen to fund the losses. I’ve learned the hard way how destructive to my wealth it can be, holding poorly performing companies that need to raise cash. It’s just a complete unknown, how much outside shareholders are going to be diluted. Why take that risk?

Risks - the list of risk factors published within the FY 12/2020 accounts also repel me as much as the numbers. Revenue is derived from Youtube advertisements, so is at risk from any adverse changes in the terms dictated by Youtube. Therefore this business effectively has no control over its revenues, and they’re from a single source by the looks of it. Awful, and very risky. Having demolished the investment case, let’s look at today’s update.

H1 trading update - quite a fancy description of the business -

SEEEN plc (AIM: SEEEN), the global media and technology platform that offers proprietary AI products and solutions to harvest video moments efficiently for brands, creators and publishers and thus enable discovery, sharing, ecommerce and improve digital marketing yield, announces a trading update for the six months ended 30 June 2021, as well as a change to its Board coincident with the launch of its 2H Go-To-Market strategy.

H1 revenues up 39% to $5.1m (that looks about the same run-rate as last full year)

Losses - seem reasonable, but it depends on how much they’re capitalising onto the balance sheet (last year it capitalised $1,977k into intangible assets, probably internal development spending I would guess), which I think is side-stepped in this figure reported below -

Improved adjusted loss before tax* of $0.9m (1H 20: $1.1m) with Group shifting from product development (funded by EIS/VCT money) to sales and marketing

* Cash of $3.9 million at end of the period to execute on growth plan
* Adjusted for amortisation of intangible assets and share based payments.

Cash burn - not as bad as last year. It has dwindled from $5.3m at 12/2020, to $3.9m at 06/2021, cash burn of $1.4m in H1. At that rate, the placing may not be needed until late 2022.

My opinion - it’s too early stage, and impossible to value, to be investable on the numbers alone. However, if people have investigated the products, and think they’re good, then that could be an investment angle.

Looking at the shareholder list, shrewdies Marlborough (now part of Canaccord) have 8.9%. There also seems to be a relationship with Water Intelligence (LON:WATR) which bizarrely holds 7.7% of SEEN. I recognised Patrick De Souza’s name on the shareholder list at 10.9%, he’s Chairman of WATR, so clearly they like SEEN.

For me, it’s not something I would want to speculate on, without doing detailed research on its products, and that’s not an area of expertise for me, so will move on.

.

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Seeing Machines (LON:SEE)

9.63p (up c.3% at 11:42) - mkt cap £373m

SEE has specialised technology which uses cameras & software to track & interpret the eyeball movements of vehicle drivers, raising alerts when driver attention is slipping, to avoid crashes.

Jack looked at the FY 06/2020 results here, and was distinctly unimpressed by yet another year of jam tomorrow promises, losses & cash burn. SEE has made these things its speciality in an astonishing 16 years as a listed company, with repeated false dawns & dilution. The share count has gone up from 870m to 3,876m just in the last 6 years. Here’s the long-term chart -

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.

As you can see, there’s been a strong surge of investor interest in the company in the last year, just as there has been for many companies, especially speculative things which tend to do very well in bull markets. Perhaps lots of new investors coming into the market has helped, as they look at things with fresh eyes, whereas old hands like me have heard the same story for 16 years now, and it’s got very stale indeed.

However, here at the SCVR we like to park our preconceptions to one side, and give everything a fair hearing. My best investments in the past have often been turnarounds that were written off by most investors, and subsequently multibag. Spotting the turnaround early can be really lucrative sometimes, so I’m always on the lookout for situations which have become fundamentally better (Cambridge Cognition Holdings (LON:COG) and Intercede (LON:IGP) have both been big winners for me in recent years, and I still hold both). Both of those are turnarounds under effective new management, after years of under-performance under old management. If you get in early, before other investors have noticed, or believe the turnaround, then making 2-3 times your money is quite possible, sometimes much more.

Trading update -

Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, provides a trading update for the year ended 30 June 2021 ("FY2021").

Main points in the announcement -

  • In line with expectations (no guidance figures provided)
  • Start of automotive royalty revenues “long-anticipated” I should say so!
  • Over 100k vehicles now on the road with SEE’s system installed
  • Royalties expected to increase sharply in next 2-3 years, as vehicle production ramps up
  • Significant growth in aftermarket - now profitable
  • Signed contracts for air traffic control, and aircraft simulators - limited competition
  • Revenues A$47.3m (up 18% on LY, up 30% in constant currency), equals £25.2m
  • [Note: £1 = A$1.88 - the Aussie dollar has weakened against sterling this year]
  • Cash A$47.7m, ahead of expectations
  • Automotive RFQs (what are RFQs?*) revenue potential A$900m
  • Established as central to the automotive sector

*Google tells me that RFQ means “request for quote”. I wish companies would put in the full term, then in brackets the abbreviation, if they’re going to use abbreviations further on. Readers may not necessarily know industry jargon.

My opinion - looking at this with fresh eyes, it sounds as if SEE has finally turned a corner, and appears to be on the cusp of finally commercialising its technology. Hence I can see why the shares have re-rated, there appears to be substance behind this.

The big question is how to value it? Readers would need to do detailed research, starting off with the basics - how much are the systems sold for per unit, what volumes are realistic? How much will overheads be? Bearing in mind that many companies spend a lot more, once the revenues are rolling in.

Many thanks to Cenkos for making an update note available to us on Research Tree. This shows rising revenues, but continued losses both FY 06/2022, and FY 06/2023, so holders must be assuming that these forecasts are beatable.

Overall, it’s great to see this share finally come good (I’ve held it several times in the distant past), but for me it’s impossible to value. I’m not keen on investments that require so much guesswork.

.


Jack’s section

Marshall Motor Holdings (LON:MMH)

Share price: 225p (+5.14%)

Shares in issue: 78,232,237

Market cap: £176m

(I hold)

It’s been flagged for a while now that car dealers are enjoying strong trading conditions. Today’s update from Marshall Motor Holdings (LON:MMH) further confirms that trend, although the group continues to note ‘high levels of uncertainty’ as we emerge from lockdowns.

The share price is now at an all time high and comfortably ahead of pre-Covid levels.

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Nevertheless the company is flagged as a top StockRank stock (99, with a Q Rank of 74, V Rank of 99, and M Rank of 92) and the valuation remains modest even on FY21 EPS forecasts that might well be beaten.

apMvo3kBjmvDEON3kdSg8O2C0OadJLH0ezJewjZchOGCi_YFgtTyRYT3SXvlp4CgeD52pF8CWpBhiD-mIiyVuU4RiLjYEIKYUnVS5HSzgPJhBc2VZmD3TLRLJskp2eIgqoxv3KE_

Trading update

This is a short update so I’ll just quote it directly.

On 25 June 2021, the Group announced that it expected to deliver underlying profit before tax for the full year well ahead of the Group's historic record result. This performance has been underpinned by a market which has benefited from positive tailwinds since April, including unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles.

Those tailwinds continued in July and the Group now has initial visibility on the outlook for August and September.

That June update was unscheduled and communicated ‘significant upgrades to both first half and full year expectations for 2021’, with an ‘exceptionally strong first half performance in both profit and cash generation’.

Consensus earnings per share forecasts were upgraded by c20% on the news.

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Marshall continues today:

There remains a high level of uncertainty over the second half of 2021 and into 2022 given well documented vehicle supply issues, an expected realignment of used vehicle values (the timing of which is uncertain) and the continuing impact of the COVID-19 pandemic. Given these uncertainties, there remains a range of possible outcomes for the year, however, the Board now expects that continuing underlying profit before tax for 2021 will be not less than £40.0m. This figure is after the commitment to repay all CJRS and non-essential retail sector grants received for this financial year.

Interim results will be released on the 10th of August.

Conclusion

We’ll be getting more detailed commentary from management next week but this is a very positive announcement that suggests FY profit before tax of not less than £40m will be at least double the level it has been at any point in the past decade.

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But the company is communicating a higher than usual level of uncertainty as well, with ongoing supply issues and ‘an expected realignment of used vehicle values’. This suggests that £40m of full year PBT might not be sustainable.

While brokers have upped their estimates for FY21, FY22 upgrades have been more tempered so it appears as though the analysts covering MMH are prudently expecting some of these profits to be given back. Unsurprising given that a lot of the outperformance is coming from the used car segment - which is where MMH anticipates a degree of realignment at some point.

The all-important September trading month is just around the corner. If conditions turn before then due to, for example, ongoing shortages, then sentiment could turn. But the scale of the profit uplift is notable: in May, the group said that it was targeting underlying profit before tax of not less than 2019’s result of £22.1m. Now the board is guiding to in excess of £40m.

If you apply the FY19 tax rate of 20.8%, then profit after tax would be at least £31.7m and FY21 earnings per share would be 40.5p, making for a FY21 forecast PE ratio of just 5.3x. These will be bumper results though and forecasts for FY22 remain a much more modest 22.7p.

Still, even with rising levels of uncertainty likely to impact H2 2021, MMH is taking advantage of the current conditions and has great momentum. It’s a well run car dealer emerging from the past year in good shape, meaning it is well placed to capitalise on sector consolidation opportunities over the medium term. This, along with a couple of other dealers, will emerge as sector winners in my view.

The usual car dealer warnings apply though: it’s a low margin business, low multiples are to be expected, and conditions can turn.


Norish (LON:NSH)

Share price: 160p (+3.23%)

Shares in issue: 30,070,378

Market cap: £48.1m

This looks like a neglected micro cap. Logistics in general is a buoyant part of the market right now and Norish is a third party multi-temperature warehousing and logistics business providing services to importers, manufacturers, wholesalers, retailers and distributors. So perhaps it is worth taking a closer look here.

The shares are illiquid, as you would expect given the size. Stockopedia indicates you can reliably buy in only c£1.5k chunks, while the spread is some 645bps. That probably rules it out for a lot of investors.

The company was founded in 1975 as a joint venture between Irish and Norwegian investors, and has been listed since 1986. It is incorporated in Ireland and operates in the UK from 6 sites, providing in excess of 50,000 temperature controlled racked pallet spaces.

Over the past couple of decades the share price performance has been unspectacular, save for that dramatic rerating that began in June 2020.

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Meanwhile, revenue growth over the past decade looks to be a tale of two halves.

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What’s interesting is that net income has been improving even as revenue falls from that 2017 peak. This suggests the company is engaged in margin-enhancing initiatives.

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And then we have Norish’s acquisitions and new businesses. They are not obvious logistics-related enterprises:

  • 2012 - acquired Town View Foods Limited, a protein commodity trading business based in Newry, Northern Ireland.
  • 2016 - established Cantwellscourt Farm Limited, a large dairy farm based in Kilkenny, Ireland.
  • 2018 - established Grass to Milk Company Limited, developing an A2-protein milk supply and combining with novel dairy processing IP, to develop an early-life stage milk-based beverage targeting high-value export markets.

Interim results

Highlights:

  • Sales +19% to £18.9m,
  • Operating profit +61% to £1.51m,
  • Pre-tax profit +73% to £1.35m,
  • Fully diluted earnings per share +74% to 3.58p,
  • Net debt up from £8.7m to £9.5m; interest cover of 9.9x.

The group breaks down results across three divisions.

Cold Store revenue +12% to £7.9m, operating profit +28% to £1.8m, and operating margin up from 19.4% to 22.1%.

Sourcing revenue +25% to £10.5m, operating profit +20% to £121,000, and operating margin steady at 1.2%.

Dairy revenue +27% to £508,000, operating profit up to £32,000 from a loss of £143,000, operating margin of 6.3%.

It’s this smaller Dairy division that could make this a potentially interesting opportunity, although it’s still early days in the commercialising of A2 protein, grass-fed, dairy products. The group has just completed the development of its supply chain and systems here for future growth.

Norish is collaborating with Bright Dairy & Food Co Ltd and New Zealand Focus Group to develop a new ultra-premium, A2-protein, grass-fed, Pure Milk UHT product for China, which will go on sale in the second half of the year. A commercial team is now in place on the ground in China and the group is expanding into high growth retail channels such as Social Commerce, E-Commerce and High-End Retail.

Group cash generated from operations amounted to £1.3m. Investment of £1.9m was made in assets, comprising £0.7m in Grass to Milk and £1.2m in equipment at the cold store division.

Conclusion

There might be something worth investigating here, but no doubt the size of the company and the lack of liquidity in the shares will put many off. It’s hard to buy in meaningful quantities, and getting out could prove equally difficult. That means you would have to invest with conviction.

There are signs of margin improvement here. First half operating margin was 8%.

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And there’s £23.7m of net plant, property, and equipment on the balance sheet which could be further investigated for signs of value.

The group looks to be quite capex hungry. It’s tricky to distinguish between growth and maintenance capex but I can imagine the core operations need a fair amount of the latter. That appears to have been the case this first half, with a £1.2m investment in Cold Store.

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I’m interested to see how the dairy division develops - Grass to Milk Company will deliver its first sale in the second half of the year and management speaks positively about the near term outlook.

Ultimately though the lack of liquidity here puts me off, especially now that the shares are out of obvious value territory given the recent rerating.

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47 comments


Avatar for TamzinXPiworld

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.

13
Avatar for Joe Turner

I know i should rightly get some stick for this comment but I'm always wary about investing in Irish businesses (Norish). Stupid to generalise but i can't help myself. My Dad ran & owned a multi-million pound business distributing plastic profile window systems for a German manufacturer in the UK & Ireland for many years.  He had exclusive rights for the UK & Irish markets. He got into it just at the perfect time (late 70s/early 80s) when plastic windows first hit the market.  He eventually decided to stop selling to the Irish market after many years of hassle/abuse/bad debts. Alot of his Irish customers simply wouldn't pay him ! They'd dare him (as an Englishman) to take an Irish company to court in Ireland over non-payment of debts to an English company ! Anyway, that's my litle ignorant prejudice. Abuse away !

25
Avatar for donald pond

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. 

8
Avatar for Joe Turner

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

6
Avatar for 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.

5
Avatar for 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

7
Avatar for 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 

5
Avatar for James Kerr1

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

2
Avatar for 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.

2
Avatar for James Kerr1

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.

1
Avatar for 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.

1
Avatar for Helvellyn

Just a general market observation on a quiet day.

I was listening to a call with Bernard Looney, Bp (LON:BP.) CEO, on Bloomberg and he said the last Q has been their best ever, he spoke about cost reduction/saving procedures having been very successful. It made me think about worldwide markets in general and how many companies had reported a similar experience  with cost cutting bought about, probably by Covid  scaring company CFOs into action and also  the majority of US companies reporting 'earnings beats' . So my question is , without being company specific, are the US markets overvalued? Many seem to think that they  must be and are on the verge of a reversal.  Personally I do not think the UK markets are overvalued but if there is a 15-20% fall in the US then the rest of the world will no doubt follow. What would trigger this fall in the US, persistant inflation, an increase in interest rates, tapering of QE and or a new variant/rise in Covid cases? Any fall in the UK  could lead to a fantastic buying opportunity  especially if the UK continues to see it's apparent success in reopening the economy without the expected rise in Covid cases. Although I am still bullish on the UK ( i don't currently hold any US stocks) I am nowhere near fully invested, I made a lot of paper gains in 2020 and early 2021 and decided to realize them. 

Any thoughts?

4
Avatar for Westway001

I think everything you say is right. The difficulty comes, however, if the US market doesn't crash and you (or I) remain uninvested and simply watch the market in general keep on rising. I know that a number of investors converted a large proportion of their portfolio to cash earlier in the year in anticipation of the US correction which never came (yet) and will have missed out on some terrific stock growth opportunities. It may happen tomorrow, next week or not anytime soon.

I certainly agree that any sizeable fall in the UK could lead to a fantastic buying opportunity.

11
Avatar for mark1308

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

1
Avatar for 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.

6
Avatar for Db47

I know it’s not a small cap...


but I was wondering Paul’s view on Thg (LON:THG) (I hold)  They announced another acquisition today of Cult Beauty.   Any views welcome 

3
Avatar for Rusty2

Not a small cap, why don't you start a separate thread for THG (LON:THG) ?

4
Avatar for Db47

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

2
Avatar for bohenie

As things seem a bit quiet this morning a small diversion if allowed. The takeover announcement last week of Charles Stanley (LON:CAY)   (CharlesStanley) by American firm RaymondJames seems to have gone by without comment  (I was on holiday!) I use their execution only platform and have been happy with the service and now concerned as raymondjames seems to operate like StJamesPlace..?  Any thoughts/comments..?

3
Avatar for willhampson

Hi bohenie, I think it's fair to assume that the Americans didn't pay the premium for Charles Stanley (LON:CAY) if they weren't planning to extract additional revenue from it. However, I think it would be difficult to justify additional fees as CS Direct is already hardly cheap and the market shift is very much towards lower fees with new entrants to the market (including, I think CMC Markets talking of commission free share dealing in the future). Will be interesting to see how it pans out, but as a customer I'll be leaving at the first whiff of fee increases; I've only really kept my account due to the faff of transferring an ISA. All the best, Will

1
Avatar for 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...........

1
Avatar for gus 1065

Hi bohenie.

Re. the Charles Stanley (LON:CAY) takeover, you may have received an email from the CS CEO Paul Abberley commenting on the deal.  If not, here’s the relevant section talking about Raymond James‘s intentions.

“Raymond James are seeking to acquire Charles Stanley because they admire our company and are supportive of the client proposition and vision developed in recent years. They intend to support and invest in the development of our services to clients. The Charles Stanley brand and heritage will be retained; the Raymond James commercial philosophy and particularly their attitude to clients, mirrors our own. For the avoidance of doubt, there is no intent to break up or reshape the company. Indeed, Charles Stanley and Raymond James UK will operate as sister companies for a period following completion of the acquisition, to ensure continuity of service and to avoid undue distractions to the staff of both firms. Long term, it is my strong expectation that clients will benefit from the sharing of knowledge, insights and expertise that may be harnessed from operating within a larger group.“

So, business as usual they suggest.  I have been a user of the Charles Stanley Direct execution only service (run out of Edinburgh) for a few years and am very happy with the service.  They haven’t tried to push any „value added“ advisory services from their London based wealth management operation so far and seem happy to run the two businesses in parallel.  Whether this approach survives the takeover remains to be seen.  Hopefully they won’t try and mess with a successful online operation, especially in a world were the trend seems to be towards lower cost/self managed investment but time will tell.

Gus.

3
Avatar for Wilbraham

Yes, I'm wary too. CSD generates well under 10% of Charles Stanley revenues and was almost spun off in a strategic review a few years ago. I can't see a US 'wealth manager' (cringeworthy term!) being interested in growing that side of the business unless they already have a similar offering. My guess is they sell it off to ii who've done a lot of hoovering- up of weaker brokers recently.

Revenue by division:

2021

2020

Investment Management Services (£m)

151.6

154.8

Financial Planning (£m)

10.0

8.7

Charles Stanley Direct (£m)

9.6

9.5

4
Avatar for 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.

9
Avatar for 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!

0
Avatar for 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.

4
Avatar for Frontrunner72

Me too Gus...

FR

0
Avatar for 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'.

0
Avatar for Chris1011

I wondered if the SCVR community can shed some light on a query I have in regards to the connection between Broker Research Notes and Stocko’s data sets.

I have just read a very comprehensive Research Note from TPI on Deepverge(LON:DVRG) (I hold) which, if the business plan is executed, could elevate DeepVerge to commercial greatness!

I then returned to Stockopedia and, knowing it ranks Deepverge (LON:DVRG)as ‘Sucker Stock’, I wanted to understand the ranking gap in analysis between it and the Research Note. I now see that Stockopedia doesn’t contain any of the Broker estimated financial numbers at all, (in fact, it even suggests Deepverge(LON:DVRG) doesn’t have a Broker!) hence I guess it can only rank it as it does.

So here’s the question. Why is there this gap? Is it the Broker not ‘pushing’ the Research Note or, Stockopedia not ‘pulling’ the info from TPI?

I would imagine if Stockopedia updated these recent numbers, Deepverge(LON:DVRG) would be ranked very differently and may appear on more screenings for a ‘buy’ consideration?

I would be interested in people’s views.

Thanks

7
Avatar for illiswilgig

Interesting that you should raise this. I have found these broker consensus figures on stocko to be quite unreliable, particularly for small caps.

In the last couple of days I came across an issue with the broker consensus on stocko for Macfarlane (LON:MACF)

Broker consensus is being quote on a bulletin board in another place as 8.9p eps  which is in close agreement with my own forecast of 9.2p eps.

But on stocko the broker consensus (1 broker, name withheld) is 6.8p and doesn't appear to have been updated for some months. Thats for a near £200m mcap company which stocko rates as a 'super stock'. 

cheers

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Avatar for leishylegs

I subscribe to both Stockopedia and Sharepad as, for me, both offer something a little different to each other but complement each other well.  Sharepad has EPS forecasts for Macfarlane (LON:MACF) of 8.9p for 2021, 9.4p for 2022 and 9.4p for 2023, which seem to be more in the ballpark figures you have calculated. Richard 

4
Avatar for sharw

Sadly forecasts are one of the most unreliable features of Stocko.

Sometimes it is because if forecasts are suspended due to a profit warning or general uncertainty of markets (this applied to many in the last16 months) the old forecast is left in. Take Tricorn (LON:TCN) , which is in deep trouble - the forecast is the same as last August and gives an enticing forward p/e of 3.33 falling to 2.75. Who cares about net debt being a massive problem when Stocko tells us the dividend yield next year will be 17.8%

Sometimes it is because the company reports in a different currency and they get confused between $ and cents. On May 6th re SEC Newgate SpA (LON:SECN) someone here said "The PE Ratio is forecast as 0.224 & 0.176 and PEG 0.008 & 0.014 which appears extremely low?" It was obviously a mess up between Euros and cents. I reported it on the green button and just 4 weeks later it was corrected.

With regard to Macfarlane (LON:MACF) the problem is that it is not obviously wrong - it is believable. Using google I came across an IC article that appears not to be behind their paywall here. It contains this picture of forecast eps showing how way out stocko is:

610a732fe0fd0macf_(2).png


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Avatar for 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

7
Avatar for CamRaid

I own a small car leasing brokerage. The demand for vehicles is high but there is very little in stock. If customers want a particular vehicle, and most do, they are looking at deliveries from November in to Q1.

As a result the prices of 2nd hand cars are increasing. Even the likes of WeBuyAnyCar and paying decent prices and people are seeing bids increasing over time rather than decreasing.

The popularity of car leasing seems to be increasing. The increasing popularity of electric cars will likely accelerate that as people don't want to hold on to aging technology when much improved is available. This increases the demand for new vehicles but also provides a steady stream of nearly new cars to the market.

Here is a bit of a plug. If you are interested, take a look at Just Leasing

23
Avatar for JohnEustace

Here is a bit of a plug. If you are interested, take a look at Just Leasing

And the Stocko discount code is ....?

26
Avatar for CamRaid

If anyone wants to use Just Leasing I will gladly waive the £180 admin fee for any Stocko members. If you make contact just mention my name - Ian. We are very competitive anyway and offer honest advice and genuine delivery dates. We don’t over promise just to win the order.

19
Avatar for Chriskay

Such anecdotal comments are always appreciated CamRaid and IMO you are certainly owed a plug. I hold Motorpoint (LON:MOTR) as I like the physical and online mix, but the same issues clearly apply.

4
Avatar for Helvellyn

i only discovered 'car leasing' three years ago after a friend persuaded me to have a look. I hadn't realised that you don't pay the road tax and if you have a two year deal and do under 10k miles a year you wont need to get most cars serviced. IMHO it is definitely the way to go if you want to drive a new car.

Richard

5
Avatar for leishylegs

Just some personal anecdotal comments to back up the update from Marshall Motor Holdings (LON:MMH) and car dealers - we’ve just purchased a new mini and got an amazing part exchange price,  as they were absolutely desperate for used car stock.  The dealer was also very surprised we received our new car on schedule as they currently aren’t able to give delivery times for new cars.  He explained he was having to advise current purchasers that their new vehicle may not arrive until December or even the new year, as they just can’t give any firm delivery dates. The sales adviser explained that this quarters entire sales targets had been scrapped as they just didn’t have enough used car stock and couldn’t guarantee new car deliveries. That said it seems the targets are being rolled into the next quarter! So there really is huge uncertainty because of new and used car shortages. My own personal view is that used car prices will revert and realign over time - even if I got a great part exchange price I would still baulk at some of the used car prices you’re seeing on autotrader at the moment.

9
Avatar for TamzinXPiworld

Here's the Nwf (LON:NWF) analyst presentation from yesterday. This is a Lord Lee stock. Gently grows, with 4-5% dividend, and a strong management team. Video & podcast.

Racier, Samarkand (OFEX:SMK) which IPO'd on the Aquis Exchange earlier this year. It provides the Nomad platform for brands to reach the Chinese consumer. Impressive revenue and margin growth in the first year. Here is the analyst presentation video & podcast. Concerning this, you may already have read Keelan's/Stockopedia's excellent IPO research.

Here's the Capital Markets Day from Tekmar (LON:TGP) who provides technology and services for the global offshore energy markets. Here, they give an update to the 5-year strategic plan and outline their ambitions. Video & podcast.

Two companies who have given 'ahead of' updates are giving investor presentations:

Vertu Motors (LON:VTU) on Tuesday 17th August, 4.30pm. With Marshall Motor Holdings (LON:MMH) also reporting ahead today, it will be interesting to hear more from Robert Forrester, CEO on the car market generally. Register here.

Somero Enterprises Inc (LON:SOM) H1 results presentation, Monday 13th September, 2.30pm. Register here.

And, the very popular Stockopedia/PIWORLD StockSlam is back Wednesday 8th September, 6pm. 10 Slammer, 10 stocks 'slammed'. Fast and factual, ideas for further research. Register here.

35
Avatar for MrContrarian

My morning smallcap tweet:

Mycelx Technologies (LON:MYX) Avacta (LON:AVCT) Conduity Capital (LON:CCAP) SEEEN (LON:SEEN) Marshall Motor Holdings (LON:MMH) Drum Income Plus REIT (LON:DRIP) James Halstead (LON:JHD) Norish (LON:NSH), £TM17

MyCelx (MYX) new contract and a twelve-month extension worth $2.1m total. [SP=37.55 Cap=7m]
Avacta (AVCT) hipment of its AffiDX covid lateral flow test has begun. [SP=130.5 Cap=331m]
Conduity Capital (CCAP) proposed RTO Smarttech247 for £33.5m in shares. "Smarttech247 is an established global artificial intelligence ("AI") based cybersecurity business specialising in automated managed detection and response." [SP=0.92 Cap=2m]
SEEEN (SEEN) guides H1(June) rev for MCN (?) up 39%. ADj pretax loss $0.9m ($1.1m). [SP=42.03 Cap=21m]
Marshall Motor (MMH) hikes FY(Dec) U/L pretax guidance to at least £40m after strong July. [SP=213.52 Cap=167m]
Target Healthcare REIT (DRIP) possible offer of 105.80p, a 9% premium, in Custodian REIT paper. [SP=57 Cap=22m]
James Halstead (JHD) FY(June) trading. H2 encouraging. "he entire market has faced production issues and several of our competitors have had to suspend production due to material shortages. To date, we have not curtailed output and we believe this has helped us gain market share. In addition, it seems clear to us that while flooring retailers were closed, due to lockdown restrictions, our commercial flooring offerings (particularly in luxury vinyl tile) were used increasingly and significantly in domestic settings." [SP=560 Cap=1166m]
Norish (NSH) H1(June) rev up 19%, pretax £1.35m (£0.78m) up 73%. Outlook positive. [SP=158.75 Cap=47m]

In line: £TM17

99
Avatar for waynelever

sorry for appearing rather dim here, but when (on previous posts) you say 'in line' where do those company reports actually appear when you do them later?  

1
Avatar for MrContrarian

>when (on previous posts) you say 'in line' where do those company reports actually appear when you do them later?
I don't do them later! If trading is in line there's usually nothing else of sufficient interest. I have to cover each company as fast as I can to get through them.

23
Avatar for Glorenfeld

Hi Wayne, I think this is a misunderstanding of terminology. "In line" means in line with set expectations (e.g. as published by brokers or the companies own expectations) 

4
Avatar for Rusty2

"In Line" means the results or trading statement is the same as the forecast.

3
Avatar for MrContrarian

Oh, you thought 'in line' meant 'in the pipeline'.

4
Avatar for waynelever

i did - sat up all night waiting for your Seeing Machines comment......lol

14
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