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Important - The contents of this blog are the personal opinions of the individual contributors and should not, under any circumstances, be construed as direct investment advice. Every effort is made to ensure the accuracy of all third party links and data but Spreadbet Magazine Ltd cannot guarantee their accuracy and nor should the material be relied upon in making any investment decisions by its readers. Spreadbet Magazine Ltd accepts no liability for any losses incurred by readers in making decisions as a consequence of the material posted on this blog.

Shooting from the hip - topical, informed and opinionated posts each & every day!

Friday
Oct312014

HOW DID YOUR FUND MANAGER PERFORM FOR YOU LAST YEAR? CLICK THE IMAGE BELOW FOR DETAILS ON TITAN'S UNIQUE TAX FREE FUNDS

 
Past performance is not necessarily a guide to the future, returns are before the application of Titan’s fees, tax legislation can change and you should always take independent advice in relation to your own financial circumstances.
Friday
Oct312014

Five Spooky Charts for Halloween...

The witching hour is about to begin, so we’ve put together a selection of charts that will really get your blood curdling…

Happy Halloween!

NYSE Margin debt is at record levels…

At a time when the S&P 500 is beginning to look overvalued in CAPE terms…

And brokers’ earnings forecasts are being downgraded…

earnings revisions

And what earnings growth is around is often driven by buybacks, which are at record levels…

buybacks

As are corporate profits as a % of GDP…

Friday
Oct312014

Zak Mir Video Blog On Bulletin Board Heroes: Castleton Technology, Ferrum Crescent and Monitise

CLICK THE IMAGE BELOW TO VIEW TODAY’S VIDEO

 

Spreadbet Magazine editor Zak Mir takes a look at the technical position of some of the bulletin board stocks of the moment amongst private investors.

Here are the key points from today’s video:

Castleton Technology (CTP)

The shares are attempting to re-group after a sharp decline from the 2p plus zone in the past week.

While there is no end of day close back below the 50 day moving average at 1.29p one would be looking for a partial or even full retest of the best levels of this month to date.

Only back below the 200 day moving average at 1.06p would currently be outright bearish.

Ferrum Crescent (FCR)

Ferrum Crescent shares have been making progress after a bear trap from below the May 0.55p floor.

The latest price action should lead back to the post June resistance at 1.5p plus over the next 1-2 months.

While there is no end of day close back below the 10 day moving average at 0.44p the upside for Ferrum Crescent should be towards the late 2014 resistance.

Monitise (MONI)

The shares have delivered an extended base from the upper 20p’s in mid September. The recovery is backed by a month uptrend line in the RSI window.

The best way forward now is probably to look to buy into any weakness towards the initial October 30p resistance zone.

Only an end of day close back below the 10 day moving average at 29p would delay the prospect of a top of April price channel target at 45p. Only cautious traders can wait for a clearance of the 50 day moving average at 35p before assuming that the downtrend is over.

ARE THE MARKETS OVER-VALUED?

GET YOUR FREE COPY OF EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS

CLICK THE IMAGE BELOW

Friday
Oct312014

The Morning News Update with RBS, WPP, Regus and Coms

FTSE 100

Rolls Royce (RR.) - BG Group has selected the Trent 60 DLE industrial gas turbine as the driver for the main refrigeration compressors in the proposed Lake Charles LNG Export project in Louisiana, USA.

International Consolidated Airlines (IAG) - posts a third quarter operating profit of €900 million, up from €690 million.

Royal Bank of Scotland (RBS) - Q3 2014 attributable profit was £896 million, up from a loss of £828 million in Q3 2013. The quarter included net impairment provision releases of £801 million, principally in Ulster Bank and RBS Capital Resolution, and litigation and conduct costs of £780 million.

WPP (WPP) - third quarter reported revenues up 3.1% at £2.763 billion, up 10.8%.

FTSE 250

Supergroup (SGP) - Profits warning. Sector discounting and continuing weather related uncertainty, together with a planned strategic investment in the cost base, has led the board to revise its full year profit guidance to a range of £60-65 million.

Regus (RGU) - in the quarter to 30th September group turnover increased by 13.5% to £413.6 million.

Elementis (ELM) - expects full year earnings per share to be in line with market expectations.

Small caps

1Spatial (SPA) - increase in Adjusted EBITDA of 140% to £1.2 million in the year to July.

Coms (COMS) - posts a loss of £214,536 for the six months to July, up from a loss of £118,645.

MartinCo (MCO) - has acquired Xperience Franchising Limited and Whitegates Estates Agency Limited for a consideration of £5.0m in cash plus an amount representing the net assets of Xperience at completion, expected to be approximately £1.0 million in cash. 

ULS Technology (ULS) - expects to report first half results in line with management expectations.

Goldplat (GDP) - remains confident that the company is on track to report an operating profit for FY 2015.

Thursday
Oct302014

James Faulkner on Sagentia: a slice of Cambridge tech cluster going cheap 

Back on the value trail, Sagentia (SAG) shares have been weak of late, mostly on the back of forex concerns due to the majority of earnings coming from overseas, principally the US. However, this is a high-margin, asset-rich business, which has received an approach in the past from its 32% shareholder and current chairman Martyn Ratcliffe. Earnings can be volatile, but Sagentia has proved itself adept at weathering the cycle. There appears to be significant value emerging at current prices.

sagentia logo

Sagentia focuses on providing world-class R&D consulting services to external organisations across three vertical segments: medical devices, consumer markets and industrial products. The company works with clients to add value and technology innovation at any stage of the product development cycle - from needs and market analysis, through to product design and transfer to manufacture.

An established business with more than 25 years’ operating experience behind it, Sagentia is part of the “Cambridge Phenomenon” of high-tech businesses clustered around that city, but also operates out of Cambridge, USA, thus giving it an international reach. Its clients range from start-ups to multinational blue-chips, including Vodafone, Johnson & Johnson, PepsiCo and AstraZeneca.

Divisions…

The Medical division is the largest of the firm’s operating units and accounted for approximately 45% of group core business revenue in H1 2014. Within this, the Diagnostics and Surgical sub-sectors typically undertake large instrumentation development projects for corporate or well financed start-up organisations and accounted for the group’s top four customers by revenue. The Patient Care sub-sector was created by combining the Critical Care and Drug Delivery business units, two less established activities, into a single sub-sector in order to increase the scale of these operations. The global medical market continues to be dominated by North American companies and in 2013 approximately 82% of the revenue derived from Sagentia’s Medical customers was sourced from North America.

Financials…

For me, one of the key attractions of Sagentia is its strong and conservatively managed balance sheet. As at 30th June 2014, shareholders’ funds stood at £32.5 million, equivalent to 87 pence per share. Of this, net cash and equivalents accounted for £13.5 million. There is also a freehold property at Harston, which was recently valued by Savills as part of a refinancing. Under the assumptions used, including tenant covenant strength and market rents, the latest indicative valuation range for the building was between £12.9 million based on occupational tenancies, and £18 million under a sale and leaseback scenario.

It is therefore worth bearing in mind that cash and freehold property account for between £26.4 million (57.6%) and £31.5 million (68.8%) of the current market capitalisation of £45.8 million. It is also worth noting that the company made no alterations to the carrying value of the property on the balance sheet following this review.

Recent developments…

In July Sagentia finally began to put its cash pile to good use, initially through the acquisition of OTM Consulting Limited, an international technology management consultancy specialising in the oil, gas and alternative energy sectors. Expected to be earnings enhancing during the current financial year, this looks like a nice bolt-on acquisition for Sagentia. The energy sector is very capital intensive, and should therefore be a rather lucrative area for Sagentia.

The sector is also undergoing heavy investment in areas such as renewables, deep water drilling and fracking, which are expected to drive new areas of production to secure new energy sources for future demand needs. While the takeout multiple of 8.1 times appears rather full for a small consultancy business, Sagentia should be able to strip out overlapping bureaucracy and corporate costs right away, which should lower the effective multiple.

What’s it worth?

In order to gain a better understanding of how the underlying business is being valued, we can subtract the value of the freehold property at Harston based on the lower end of Savills’ valuation estimate (£12.9 million, or 34p per share). In addition to this, we also need to subtract net cash (£13.5 million, or 36p per share) to reveal an implied market value of £19.4 million, or 52p per share.

On this basis, the operating business is trading on an earnings multiple of just 8.5 times for the current year, falling to 8.2 times for FY15. What’s more, broker Numis forecasts net cash to rise to £16 million (43p per share) by the end of 2014, and then to £20.3 million (54p per share) by FY15.

Factoring these numbers in to our valuation, we can see that the underlying business is being potentially valued at just 5 times earnings for FY14, falling to just 3.7 for FY15 - and this is before any potential increases in the value of Harston (which has in any case been included at a conservative valuation).


 

Thursday
Oct302014

Zak Mir discusses the FTSE 100, Afren, ASOS, Gulf Keystone, Audioboom, Frontera Resources, BT Group, Barclays, Capita, Thomas Cook and Standard Life on TipTV

Zak Mir discusses the FTSE 100, Afren, ASOS, Gulf Keystone, Audioboom, Frontera Resources, BT Group, Barclays, Capita, Thomas Cook and Standard Life on TipTV

CLICK HERE TO VIEW TODAY’S VIDEO