Small Cap Value Report (Mon 27 Nov 2023) - D4T4/CLBS, FDEV, EPWN, SYS, CNC, MMAG

27th Nov '23 by Paul Scott

77 comments 8602 reads

Good morning from Paul & Graham!

Today's report is now finished.

Mello Chiswick - it’s this week, Wed 29 & Thu 30 November. It’s an absolutely superb line-up of high calibre speakers this year. Also a great social event, where we enjoy chatting to pretty much everyone in the bar over the course of the evening, so if you’re there, do say hello. Everyone on the Stockopedia team loves to meet subscribers in person. We've roped in Roland to provide some cover here, so that people not attending Mello won't lose out with substandard SCVRs.

++ BREAKING NEWS ++

Musicmagpie (LON:MMAG) announces that both named potential bidders, BT and Aurelius have stated they do not intend to bid for MMAG. It continues to seek buyers, and this is looking increasingly like a desperate, rescue or bust type of situation. I was already RED, because the business model doesn't work. I think equity could easily be worth zero here.

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 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).

A key assumption is that readers DYOR (do your own research), and make your own investment decisions. 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.

What does our colour-coding mean? Will it guarantee instant, easy riches? Sadly not! Share prices move up or down for many reasons, and can often detach from the company fundamentals. So we're not making any predictions about what share prices will do.

Green (thumbs up) - means in our opinion, a company is well-financed (so low risk of dilution/insolvency), is trading well, and has a reasonably good outlook, with…

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Helvellyn

27th Nov '23

There is a Stockopedia issue with name/ticker changes in my experience.

With PhotoMe Group's ME International (LON:MEGP) change all the RNS data was lost from the date of change, which is frustrating.

Orval

Creightons (LON:CRL) Managing Director has left the company today, he is third largest shareholder with 8% of company. Creightons share price is at a 5 year low, 22p. I got fed up in July 2022 after year end results, and sold out between 38p and 43p. My average buy price for Creightons was 80.7p, and sell price was 55.7p, so I lost 30%, which is a big loss, but glad I did sell out as the share price has since halved.

Boon

I'm not quite sure the 94% number in ECO Animal Health (LON:EAH) is such a solid visibility for FY Mar24 expectations.

For one, it includes current order book, which may or may not be subject to cancellations, delays, etc.

And two, it is also based on "current run rate".

Coupled with the "cautious optimism" statement and "FYI second half weighting" and some other woolly caveats in the outlook statement...

Suggests to me that management may be hedging for a high possibility of missing full year expectations.

In addition, China's hog industry is getting weaker in the run up to Chinese new year... Not great for that market, if farmers pull back on Aivlosin because of poor hog prices.

Alistair Lindsay

On Molten Ventures (LON:GROW), Sequoia is reported to have written down the value of its holding in Graphcore to zero, but GROW has written down its holding by 11.3% (purchase price of £24.0m vs. stated value as at 30.9.23 of £21.3m, although GROW was holding its stake at a higher valuation on 31.3.23). This is not to say that Sequoia's valuation is correct, but the dispersion between the two valuations is striking.

mojomogoz

Molten Ventures (LON:GROW) in weaker position and must scrimp and scavenge what it can to keep valuation up so as to keep a route to funding open. Tick tock

Equity Development

ECO Animal Health (LON:EAH) - following Interim Results this morning, just a reminder that we are hosting an investor presentation with Q&A on Wednesday at 3pm, sign up to register at the link here: https://www.equitydevelopment....

blaz

they are also available via Spotify if you have an account that is

SundayTrader

The share price is telling us that things are worse than the story in the last update. This would seem to be confirmation. This has been one of my poorer investments - usually I try to avoid low margin businesses dependent on volume. Particularly disappointing when contrasted with Warpaint. I should stick to my principles.

JASVFS

Thank you for your coverage of Epwin and Concurrent Paul, we hold, your cautions are noted and my optimism is reigned in slightly.

yiannos1

Increase in cash flow here has nothing to do with operational positive cash flows-just working capital movements and decrease of inventories.

100m revenues (probably a future miss!) on a 5% operating margin and a 72m market cap is nothing to get excited about.

Frontier Developments plc

I disagree with Graham’s analysis and the supposedly healthy balance sheet. Cash burn has been about £5m only the last 2-3 months and it doesn’t seem that this cash drop will ever stop!

A very bright red for me.

Silver Moon

ridavies, I replicate a small part of my Google home page:

You can see these boxes are shortcuts and the one you will be most interested in is the one that contains the URL :

https://feeds.acast.com/public... thanks to Paul for placing it on his SCVR.

Silver

Obviously it is not as ii has got it all together.

iamflimflam1

I’ve had some recent trips to Poland and it’s positively booming. I got a very strong sense of optimism from the young (mid twenties early thirties) people I spoke to. I’ll take a look at DPP as it would be good to get some exposure there.

Investor Meet's reminder email came in at 12.54pm, I 've noticed the reminders are getting too tight but this was ridiculous. A good job I noticed just in time the note left in the SCVR that it was planned for 10 am. I hold Volex (LON:VLX) and was cheered up by Nat.

davidallen77

Never buy illiquid stock early, i hold a tiny amount sold half a few week ago may buy back

Bouden54

Agee with most of this, although I do think Augmentum Fintech (LON:AUGM) also looks interesting in this space. On a c50% discount, but tons of cash so no danger of a dilutive fund raise, and they are also quite prudent in terms of not excessively writing up valuations.

JimMcLad

Silver Not sure it's Investor Meets' problem. I got a reminder from them before 0900 this morning.

ridavies

Thank you Silver Moon

No I dont but thanks anyway blaz

Small Cap Value Report (Mon 27 Nov 2023) - D4T4/CLBS, FDEV, EPWN, SYS, CNC, MMAG

Explanatory notes -

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Paul Scott

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