Small Cap Value Report (Mon 22 July 2024) - BKS, TSTL, FNX, ARC, ADVT, CSSG. Brief: GUS, BAR

5:50am by Paul Scott

81 comments 6306 reads

Good morning, Paul & Graham here!

It's a clean sweep today, we covered everything, and mostly interesting companies too. So we'll sign off.

Let's hope the IT problem that caused so many problems globally on Friday has now been resolved, with prompt RNSs at 7am hopefully. Update: so far, so good!

Mello Monday starts 17:00 later today - details here. One of my favourite shares over the last couple of years, Cohort (LON:CHRT) is presenting. Having done so well, do the shares have further upside? I believe Richard Crow is on the BASH panel, he's always worth listening to. Also Vin Murria of AdvancedAdvT (LON:ADVT) is on!

Begbies Traynor (LON:BEG) - it's the quarterly Red Flag Alert Report - which is particularly gloomy this time, even by Begbies standards! There's been a considerable increase in companies classified as being in "significant financial distress". Especially in travel & tourism, hotels, health & education, and bar/restaurants. "Serious concerns" remain in construction, real estate, and support services sectors.

Explanatory notes -

A quick reminder that we don’t recommend any shares. 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 news on the day, with market caps (usually) between £10m and £1bn. We usually avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech, investment cos). Although if something is newsworthy and interesting, we'll try to comment on it. Please bear in mind the "list of companies reporting" is precisely that - it's not a to do list. We typically cover c.5 companies per day, with a particular emphasis on under/over expectations updates, and we follow the "most viewed" list of readers, so if you're collectively interested in a company, we'll try to cover it. Obviously with the resources available, we can't cover everything! Add you own comments if you see something interesting, and feel free to discuss anything shares-related in the comments.

A key assumption…

Unlock with Email

Unlock with Google

Already have an account?
Login here

Newtarrow

2:30pm

So did I, would normally say below 3% wouldn't it

Paul Scott

2:31pm

Thanks for the compliments Toad1957, but no thanks! It sounds a horrific idea!! (although strangely tantalising - it's the sort of thing I would probably agree to over a lavish dinner, and then launch on a wave of optimism, before collapsing into acrimony within days. That's what usually happens with projects I get sucked into LOL!)

EDIT: making it all the more remarkable that Stockopedia have put up with me for 12 years!

Hence why now I just do monologues on the podcasts, it's better that way. People either like them, or they don't, and I don't give a rusty Austin Allegro (as the rhyming slang goes) either way.

Wolf of Small Street

2:42pm

Yes, youre probably correct, they'd normally say under 3%. Someone's happy to reload the offer for now even with all the buying.

Amazing it's taken over a year for them to shift 20%

rmillaree

2:45pm

I fear you cannot thrust stuff like this down kids throats - i suspect most kids who are interested in stuff like this would probaably say - you must be mad investing in uk stocks when us has this return on tesla/apple/nvidia and crypto has that return al of which detroys uk stock returns.

Not sure even i would be for forcing or bribing people to buy british either - is that not kinda anti market forces. If we pump up temporarily on one off fashion the price of uk popular uk stocks as there is limited options is that not likely to unravel at some stage ?

2:52pm

Hi Aislabie,

Thanks for mentioning Brave Bison (LON:BBSN)

I saw it rose 13% today, but I've logged off for today, so didn't round to reviewing it, sorry about that.

You said -

"I know that Paul is not well disposed towards marketing companies (SCVR June 17 2024).."

I read that, and thought to myself, that sounds wrong. Sure enough, on checking our archives, I was GREEN on BBSN here on 25/1/2024, and Graham was also GREEN on 13/5/2024.

So please can we set the record straight, that the SCVRs have been positive towards BBSN, and not negative as you suggest.

This type of thing is really frustrating for me. I respect your views normally, but would you mind fact-checking via my summary spreadsheet here, before posting, which is deliberately open to anyone, so you can see what we actually said, rather than incorrect recollections.

Thanks! Paul.

carmensfella

2:53pm

Renold management unavailable but we will probably discuss the situation post results on the BASH

andrewdb

2:57pm

Thank you. I must try some of their reds.

Gimmers

2:59pm

Just a reminder re Card Factory (LON:CARD) . Edison FC 14.4p EPS for 2025 so even with todays SP move we are just over a PE of 7. If it re-rated to say 11 we'd be back up to 158p which I don't think is unreasonable.

sevenccc

3:02pm

Now let's see who the buyer is! Card Factory (LON:CARD)

Presume we will see the buyers RNS this week as even if they went to an existing holder it will have crossed a threshold somewhere. Nice piece of good news for holders. GLA

Initial reaction - I'm in! 20% bounce I reckon.

No hang on, this needs more caution. Let's give it some thought. Leave it with me.

jonno

3:03pm

Card Factory (LON:CARD)

Have been adding a few of late. I wonder who has bought out Telios? Funny enough Richard Crow suggested a few weeks ago that someone would buy out the Telios stake. Fair play to Richard he is a very astute investor.

All being well the share price should re-rate. It will never attract a high rating but providing trading is in line., a PE of 10 should be readily achievable.

Time will tell.

3:12pm

Just a reminder with one hour to go......We have a great Mello Monday show lined up for tonight and very topical as Vin Murria is back with us presenting the AdvancedAdvT results that have just been released this morning. The BASH should be interesting with Richard Crow aka Cockney Rebel and Alan Charlton on the panel. We will also look closely at the Renold situation on the BASH as it has been a popular company since we analysed them.

Join us for a jam-packed MelloMonday on Monday 22nd July 2024, at 5:00pm. The programme for the evening is as follows:
5:00pm Paul Hill presents "Investing in turnarounds”
5:30pm Company presentation from True Royalty
6:10pm Company presentation from Cohort plc
6:40pm Vin Murria presents AdvancedAdvT Limited results
7:00pm Company presentation from Time To ACT plc
7:30pm BASH Panel with Richard Crow and Alan Charlton

For more information, click here: https://melloevents.com/mm220724/
There are lots of interesting sessions and all annual pass holders and individual ticket holders will be sent a recording of the show within 48 hours of registering. For half price tickets, use code MMSTOCKO50. https://www.tickettailor.com/events/melloeventslimited/1317444

*EXTENDED ANNUAL PASS OFFER* Get 20% OFF our Spring Annual Pass (May 2024 - Apr 2025) with the code APJULY20 https://tickettailor.com/events/melloeventslimited/1245910…

3:20pm

Palace Capital (LON:PCA)

Waiting for the funds from the tender offer to reach my ISA, but in the meantime I see that Christopher Mills and his North Atlantic Smaller Companies Investment Trust (LON:NAS) has increased its holding to 8.4% from 6.3%. Interesting!

Norfolk'n'Good

3:33pm

Looking at the RNS for Card Factory this pm have Teleios just dumped the remainder of their position?

Stockopedia | Card Factory PLC - Holding(s) in Company | Card Factory News (CARD)

EDIT Sorry just seen thread below - news only just reached Norfolk.....

WarrantStar

3:46pm

Card Factory (LON:CARD) Wolf Thank you for your post. This was on my Waiting to Buy list, the required event being that Teleios had sold out. I have just bought some as an opening position, and will buy more if the price continues to rise.

Charles Mitchell

3:50pm

Jonno- I did not tender any of my holding. There is value in PCA- need NAS and Peter Gyllenhammar to push the board to act a bit faster.

3:56pm

Jet2 (LON:JET2)

Orval makes a fair point, but my reference was principally to the extract below taken from the recent prelims.

"Looking Ahead

I am extremely pleased with how our Leisure Travel business has performed in the two years since the pandemic. Not only have we capitalised on the growth opportunities presented, with the business having nearly doubled its pre-Covid revenue, we have also remained true to our values of carefully investing to secure our long-term growth aspirations, whilst ensuring we maintain financial stability and flexibility.

With this in mind, and demonstrating our confidence in our future growth plans, we recently exercised the remaining 36 purchase rights of our Airbus aircraft order originally announced in late 2021, meaning we now have a firm delivery stream of 146 A321neo aircraft through to 2035. This valuable long-term order provides favourable operating cost efficiencies and enables us to confidently plan for the long-term as we continue to expand our footprint and the range of new and exciting destinations, ensuring we can continue to delight our Customers for years to come. In addition, our People, Service, Profits philosophy is timeless and actively guides our engagement with our most valuable asset, our Colleagues. Combined, these qualities provide a strong foundation to continue on our exciting journey in delivering on our long-term strategy, To be the UK's Leading and Best Leisure Travel business."

planetx

4:14pm

Croma

Looks ok to ne Im a reasonably long term holder .

Managrment have a simple plan rhat they have executed on time .

Being of limited brainpower I tend to apply the acid test “would I buy this busiiness” .

4 million quid Now with a promise of 3 more

Plus freeholds and stock Im guessing at 2-3 million

Making 500k now to 1 million

In a fairly stable market .

Looks ok to me though Id suggest the managrment are a bit too well paid but not offendively so .

Id buy thar company and let it run.

For sure better investments going fo make you more money out there .

But this is a Dennis Irwin / Norman Hunter share not a Ronaldo / Maradona .

4:28pm

Let's be honest! Their wine is rubbish, and costs maybe 3-4x French, Spanish, or Chilean (or Co-op or Tesco).

This is why Ashcroft & all the other investors want out. No return! They want to pass on their bad investments to some new mugs!

4:29pm

Hi Charles

Fair play to you. I tendered the 23%, I still have a reasonable holding relative to the size of my portfolio, but wanted the cash to provide some flexibility as I operate exclusively within my ISA.

Small Cap Value Report (Mon 22 July 2024) - BKS, TSTL, FNX, ARC, ADVT, CSSG. Brief: GUS, BAR

Explanatory notes -

Unlock the rest of this article with a 14 day trial

About the Author

Paul Scott

81 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...