Category: Company analysis

Weekly Market Commentary 27/06/22|STEM, K3C, REC| Wirecard: fraud and flawed

Bruce looks at Dan McCrum’s book on Wirecard and suggests that there are still a couple of details that don’t make sense about the fraud.  Plus upbeat releases from STEM, K3C and REC. The FTSE 100 recovered +1.2% to 7,101 last week. The Nasdaq100 and S&P500 were up 0.9% and flat over the last 5 […]

Weekly Market Commentary 20/06/22|DEVO, FDEV, BOTB| Remembering the days of Pali

Bruce reminisces about the demise of Pali, a firm he worked at in 2008 and looks at a couple of computer games companies (DEVO and FDEV) plus BOTB that reported last week.  Markets had a difficult week with the FTSE 100 was down -3% to 7,114. The S&P500 and Nasdaq100 both fell -9% as the […]

Screening For My Next Long-Term Winner: IntegraFin (LSE: IHP)

Difficult markets prompt Maynard Paton to search for ‘quality’ companies at reasonable prices. Filters for robust financials and director shareholdings lead to investment platform IntegraFin. Difficult market conditions for highly-rated ‘quality’ shares have prompted further back-to-basics filtering. Hence a new screen to identify companies offering robust financials, respectable growth, useful director ownership… and a reasonable […]

Weekly Market Commentary 13/06/22|ORPH, MRK, AO|Life sciences catch the software bug

Bruce looks at the spread of expressions like ‘platform’ and ‘flywheel’ from software companies to other sectors, including life sciences. Companies covered ORPH, MRK and AO. The FTSE 100 was down -1.5% in the last 5 days to 7,418. That’s better than the Nasdaq100 -4.8% and S&P500 down -3.8% over the same time frame. Brent […]

Weekly Market Commentary 30/05/22| AIM, KNOS, RNT, MORE| Analysing the de-rating

Bruce looks at how the market has de-rated on a price to sales metric since Q4 last year. But there are still 111 AIM shares trading on more than 10x revenue.  Companies this week KNOS, MORE and RTN. The FTSE 100 rose +2.5% to 7569 last week. The S&P500 +4% and the Nasdaq100 +3.4% both […]

JDG V SDI: The Battle of Buy and Build

Shortly after Judges Scientific makes its biggest-ever acquisition, Richard sets out to discover whether the pasture is greener over at SDI, a smaller listed business that does much the same thing: buys and builds companies that make scientific instruments. If I were to use one measure to compare highly acquisitive businesses it would be Return […]

Weekly Market Commentary 23/05/22| OWIL, EQLS, FUTR, MONY| The value of amnesia

Bruce ponders the ingredients required to precipitate a systemic crisis, and why memories are so short in financial services.     The FTSE 100 was flat at 7413 over the last 5 days. US markets had a more difficult week with the S&P500 -0.75% and Nasdaq100 -0.60%. The S&P500 is approaching bear market territory down […]

Weekly Market Commentary 16/05/22 |WATR, CCT, TET| Come on Eileen

With the BoE now suggesting inflation peaks at 10% later this year, Bruce goes back to 1982 when Dexys Midnight Runners were topping the charts to compare household indebtedness then v now. Stocks covered WATR, CCT and TET. The FTSE 100 fell -1.3% to 7286 last week. The Nasdaq100 was down -7% and the S&P500 […]

Weekly Market Commentary 09/05/22 |LUCE, RCH, SFOR, LTG| Lazy formulas

Bruce looks at how successful formulas, if copied without thought, can become lazy thinking.  He looks at a profit warnings from last week LUCE and RCH.  Plus a couple of acquisitive “roll-ups” which the auditors delayed signing off the results: SFOR and LTG. The FTSE was down -0.9% at to 7,443 last week. The US […]

Weekly Market Commentary 03/05/22 |ZOO, SWG, SMV| An infinite puzzle with no edge

Bruce discusses the concept of “edge” – now that we all have access to the same information, how can anyone enjoy an advantage? Companies covered this week ZOO, SWG, SMV. The FTSE 100 was flat at 7,516 over the last week. The Nasdaq100 and S&P500 were down -2% and -2.4% over the same time period. […]

Portmeirion Group PLC: Portmeirion goes back to the future (LSE:PMP)

Richard re-examines one of his worst trades and considers whether changes at Portmeirion, the manufacturer of tableware and other home accessories, are enough to make him reconsider. Half a failed trade Portmeirion is one of the more severe of many blots on my trading history. I added Portmeirion to the model portfolio I run for […]

Weekly Market Commentary 25/04/22 |NFLX, CBOX, SOLI, CAPD| Lion King v Tiger King

Bruce questions whether the value of intangible assets on Netflix’s balance sheet are of the same character as Disney’s intangible assets.  Plus a mix of UK stocks that reported last week CBOX, SOLI and CAPD. The FTSE 100 was down -0.2% to 7,563 last week. The Nasdaq100 was down -3.5% as Netflix was the latest […]

Small-Cap Spotlight Report: Beeks Financial Cloud (LSE : BKS)

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Beeks Financial Cloud offers investors a convincing growth story backed by recurring revenue balanced by hefty expenditure and a racy valuation. Maynard Paton weighs up the pros and cons. Every share has a bull case and a bear case. Our job as investors should be to consider the arguments from both sides, and decide which […]

Weekly Market Commentary 19/04/22 |ARKK, PZC, MRK, AGFX | Growth Stocks and the St Petersburg Paradox

Bruce digs out an obscure 1957 paper on growth investing, that Warren Buffett refers to when answering a shareholder question at his AGM and applies the thinking to the ARKK Innovation ETF.  Plus PZC, MRK and AGFX trading updates last week. The FTSE 100 closed ahead of the Easter weekend at just above 7,600, that’s […]

Morgan Advanced Materials | Follow the fd (LSE : MGAM)

Prompted by the notion that executives sometimes vote with their feet, Richard takes a first look at Morgan Advanced Materials. It recently poached Victrex’s chief financial officer. A by-product of attending the Victrex Annual General Meeting earlier this year was the opportunity to ask its chief financial officer why he was leaving for the arguably […]

Weekly Market Commentary 11/04/22 |DEVO, IGP, AFM, ELIZX | Clubs money can’t buy

This week Bruce takes a look at Elon Musk’s Twitter activism and what the London Stock Exchange might learn from Musk’s other activities. Companies covered computer game publisher DEVO, online identity company IGP and management consultancies AFM and ELIX. The FTSE 100 was 7,619 +1.1% last week. The UK index of blue chips has been […]

Weekly Market Commentary 04/04/22 | TND, BUR, EQLS | Diversification through time

Bruce looks at how pound-cost-averaging can help when the investing environment is particularly uncertain or the relationship between asset classes breaks down.  Companies covered BUR, TND and EQLS. The FTSE 100 was up +0.8% last week to 7535. The Russian stock market was up +28%, after it re-opened following it being closed for a month, […]

Luceco PLC| Climbing the wall of worry (LSE : LUCE)

Richard finds answers to his questions about Luceco, a manufacturer of electrical products that power our homes. Knowledge, he finds, can be as powerful as electricity… This time last year one of my screens picked up Luceco, a company that makes electrical products like sockets. I wrote down my hopes and fears in SharePad and […]

Weekly Market Commentary 28/03/22 | SPSY, FNTL, JDG | Engines that move markets

Bruce suggests that strong equity markets may be reflecting asset class rotation out of government bonds, rather than optimism about the situation in Ukraine.  Companies covered this week SPSY, FNTL, JDG The FTSE was up less than 1% to 7,492 last week. The Nasdaq100 and S&P500 were up +2.4% and 1.3% respectively. US Government bonds […]

Weekly Market Commentary 21/03/22 | FNX, TCAP, LIT | Off Ramps

Based on conversations with a first hand source, Bruce believes the narrative about Ukraine may be too optimistic.  But would be very happy to be proved wrong in the next week or two if a cease fire is signed AND upheld.  Companies covered Fonix Mobile PLC, TP ICAP Group PLC and Litigation Capital Management. The […]

Weekly Market Commentary 14/03/22 | CKN, BGO, FCH | Frameworks for resolution

Bruce remains in risk averse mode, keeping an open mind and updating beliefs to see how the conflict in Ukraine might resolve.  He looks at Clarkson, which should benefit from high commodity prices, and also Bango and Funding Circle. The FTSE 100 was up +2.7% to 7,178, having had a very volatile week. The S&P […]

Weekly Market Commentary 07/03/22 | CLX, NICL, SPA | The rich trade of the Black Sea and beyond

Bruce looks at the root causes of the conflict in Ukraine, and outlines two scenarios that the Bank of Georgia research team (who know a thing or two about Russian invasions) have discussed.  Plus 3 companies reporting last week.  “All civil wars are dynastic wars, my lord King; all overseas wars are trade wars…Troy commanded […]

Weekly Market Commentary 28/02/22 | NWG, LLOY, BARC, HSBA | Banking on Price to Book

Bruce looks at UK banks’ FY Dec 2021 results and draws out some themes on revenue, profitability, “one off items”, competition, interest rates and price / book valuation.  The FTSE 100 sold off sharply last week down -4% on Thursday last week. US markets were more sanguine with the S&P500 down -1.4% and the Nasdaq100 […]

Roll-out, Roll-up and public market arbitrage | SBRY, PRZ, COST, DCC, MRL, BREE

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Jamie Ward takes a detailed walk through two expansion strategies and outlines the types of company and sectors where investors are likely to find these strategies as well as highlighting how to spot companies using them well. Two common ways for profitable growth for many companies can be summarised as roll-out and roll-up. Roll-out is […]

Screening For My Next Long-Term Winner: James Halstead (LSE:JHD)

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A wobbly market prompts Maynard Paton to search for potential ‘safe havens’. Filters for net cash, high margins and a pandemic-defiant dividend lead to vinyl flooring specialist James Halstead. Recent market wobbles have prompted some ‘back to basics’ filtering. Hence a new screen to identify companies that have strong balance sheets, robust margins and a […]

Weekly Market Commentary 21/02/22 |STAN, HEIQ, THG, FLTA, FRAN| Banking on the metaverse

Bruce remembers a former colleague, who preferred face to face interactions and was rarely at his desk during the afternoon (clue: he wasn’t in the metaverse either).  Plus comments on Standard Chartered, HeiQ and Franchise Brand’s bid for Filta. The FTSE was down -1.5% to 7,543 last week. The Nasdaq100 was down -0.6% and the […]

Beazley PLC | Property & casualty insurance and diversification (LSE : BEZ)

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The task of investors is to find businesses that have created value, have a good chance of doing so in the future and are run by honest actors. This task is complicated by certain sectors where businesses don’t ‘look’ like most businesses. Jamie Ward returns with a look at Insurance through the lens of one […]

Weekly Market Commentary 14/02/22 |PZC, K3C, SOLI| Never says “never banks” again?

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Bruce suggests that while long term “expensive quality” investments have become increasingly popular as discount rates have fallen, a natural hedge for such a portfolio is bank shares, which could now benefit as rates rise with inflation. The FTSE 100 was up +2% to 7,617 last week. The S&P500 and Nasdaq100 were flat. The real […]

Weekly Market Commentary 07/02/22 |RSW, JHD, JOUL| Quality can’t be quantified…

While he is away skiing, Bruce asked ex-fund manager (with 16 years experience) and private Investor Jamie Ward to manage his weekly commentary this week. Jamie looks at the best things about being a private investor compared to being in the Square Mile as well as results from three companies that at some points in […]

Weekly Market Commentary 31/01/22 |CBOX, DLAR, CNS|: All I want to know is…

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There’s considerable institutional pressure on financial analysts to be positive, but often the most valuable information is negative: what to avoid.  Bruce looks at a couple of case studies that reported last week. The FTSE 100 was flat last week, at 7,497. Matt Moulding’s THG fell to 134p, down -10% in the week and now […]

Cake Box Holdings has some accounting issues | Small-Cap Spotlight Report (LSE:CBOX)

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Cake Box’s shares have tripled as its franchisees sell more egg-free cakes and open more shops. But Maynard Paton discovers the accounts contain some unusual financial disclosures and alarming remarks from the auditor. Oh dear. I had expected this article to celebrate a dynamic growth company that had commendably prospered during the pandemic. I find […]

Screening For My Next Long-Term Winner: Ashmore

Ashmore PLC

Terrific margins, plenty of cash, a reliable dividend and a modest rating could make Ashmore a decent QARP stock. Maynard Paton studies the fund manager and discovers how lower charges have limited past growth. Shares offering ‘Quality At a Reasonable Price’ have been hard to find during the last few years. But recent market conditions […]

Marks Electrical plc | I liked the service so much, I nearly bought the company

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Richard was so impressed by his first look at newly listed Marks Electrical, he was tempted to buy something from the online retailer of cookers and other domestic appliances. As for the investment, he was tempted too… I do not know whether it is a glitch or a feature, but a quirk of SharePad has […]

DFS plc | Will the investment last as long as the sofa?

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Richard likes a business that is in control of its own destiny. He takes a look at DFS plc, the sofa seller that unexpectedly featured in his list of vertically integrated businesses. Of all the names that came up in my trawl for vertically integrated businesses, sofa seller DFS was perhaps the most surprising. To […]

Small-Cap Spotlight Report: Goodwin

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30-bagger Goodwin has pivoted towards higher-margin contracts to widen its competitive ‘moat’. Maynard Paton weighs up the engineer’s haphazard financials with the delightfully old-school management. This quote from Richard Beddard caught my eye the other week: “If something truly special is incubating, we may profit from our investment for decades.” I am always up for […]

Four live pivots: Next, Goodwin, Bloomsbury Publishing and Victrex

Richard goes hunting in his own portfolio for companies incubating better businesses. They may be undervalued as a result. As promised, this week I am following up my last article on past pivots that worked with an article about live pivots that look like they are working. I used the word pivot to describe a […]

Screening For My Next Long-Term Winner: Curtis Banks

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Specialist SIPP firm Curtis Banks has seen its dividend go up but shares go nowhere during the last five years. Maynard Paton now wonders whether the small-cap’s recurring income and high margins make it a ‘QARP’ stock. Shares offering ‘Quality At a Reasonable Price’ have been hard to find during the last few years. But […]

Should you buy SDI shares? | Screening For My Next Long-Term Winner

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Acquiring private companies that make precision instruments has propelled SDI shares to 12-bagger status over the last five years. Maynard Paton recaps the story and prospects of the ‘buy and build’ specialist. Everybody loves a share that keeps going up. SharePad lists 168 names that have delivered 15% or more annualised turns during the last […]

History of Games Workshop shares | When turnarounds become transformations

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Inspired by Maynard’s article on Hornby’s turnaround, Richard examines the history of Games Workshop to imagine what challenges lie ahead if Hornby is to emulate the success of this outwardly similar hobby business. The idea for this article came from Maynard’s article about Hornby. To my mind he convincingly described a turnaround that is already […]

3 questions about Oxford Instruments plc | Deep dive into financials

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Richard goes deep into Oxford Instruments’ annual reports and SharePad for answers to three questions to establish whether it is a good “pick and shovel play”. In my last article I explained how I used custom tables to find Oxford Instruments, a highly profitable business that seemed to have lost its way and then found […]

Should you buy Hornby shares? | Small-Cap Spotlight Report

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Events at Hornby prove how turnarounds can take years. But fresh capital, better management and a return to profit could mean the model-train specialist is over the worst and finally heading towards a proper recovery. Turnarounds can be tempting. You find a business that has hit big trouble with a stock price at rock bottom… […]

Weekly Commentary 09/08/21: What $16 trillion of negative yields are signalling

Last week the FTSE 100 was up +1.1% to 7,111, Nasdaq was up 1.5% to 15,181, outperforming the S&P 500, up +0.8% to 4,429. Both the Hang Seng index in Hong Kong and the FTSE China 50 Index were up less than 1% last week. The US 10Y bond yield continued to fall to 1.19% […]

Should you buy ASOS shares? | Screening For My Next Long-Term Winner

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ASOS share news Fashion website ASOS is among the market’s greatest growth stocks, but a recent update knocked 18% off the share price. The P/E may not be outrageous if huge warehouse and IT costs can one day deliver a suitable return. One of my favourite screening strategies is to hunt for attractive growth companies […]

Making strides in forex: Should you buy Argentex shares?

I am sure many readers will be familiar with the impact of COVID-19 on the foreign exchange market. Subjugated to the rises and falls of major economies, the foreign exchange market faced wrath like so many other industries. As unemployment reached unimaginable figures, remittances fell to tragic lows. The year 2020 is a year of […]

Investing in Team17 shares: A team worth joining?

Richard is thinking about joining computer games developer and publisher Team17 as a shareholder. It would be a bold decision, but he would rather invest in Team17 shares than the closest alternative, Frontier Developments. The first thing that attracted me to Team17 was the financials. The second thing was the chief executive. That is because […]

Equals Group PLC: Are they making a comeback?

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  Equals Group Plc (EQLS) is a provider of international payment services. The company operates through the following segments: Currency Cards, International Payments, Travel Cash, Banking and Central. It develops a cloud-based person-to-person payments platform that enables personal and business customers to make payments in a range of currencies and countries. The company was founded […]

The Trader: Trading Turnarounds

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Everyone likes a turnaround. This is because people like the idea of buying at the bottom and reaping the rewards.

However, trading turnarounds can take a lot of time. Businesses are often slow to change and it is not a quick process.

This article will show you how to trade some potential turnaround stocks and give you some pointers to look at next time you are considering trading a turnaround.

Weekly Commentary: 22/02/21 – All Aboard for Mu Mu Land

At midnight, on 1st January this year, the K.L.F. released their back catalogue of music (hits such as 3AM Eternal, Justified and Ancient, Last Train to Trancentral) on Spotify and uploaded their old videos to YouTube. This was their first activity as a band since 1992, when they announced they were leaving the music industry […]

Screening For My Next Long-Term Winner: IG Group

For some time now IG Group has been flashing on my SharePad filters. The three screenshots just below show IG offers: High margins; Decent returns on equity; Cash-rich accounts; Attractive five-year growth; A lack of past acquisitions, and; A modest P/E. Those characteristics are an unusual mix in a market presently bereft of obvious quality […]

Roll up! Get yer easy returns here…

Bunzl, a company I investigated last year, is a classic roll up A distributor of everyday items consumed by businesses and organisations, it routinely acquires much smaller distributors, improves their efficiency and creates economies of scale. This reduces customer’s procurement costs, and improves the profitability of the mothership. To grow, the company has repeated this […]

Weekly Commentary: 18/01/21 – Reincarnation as the bond market

In the early days of a new Democrat presidency, the President’s campaign manager observed that: “I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a 0.400 baseball hitter. But now I want to come back as the bond market. You can intimidate anybody.” The […]

Weekly Commentary: 14/12/20 – Taxes steering behaviour?

After a strong November and start of December the FTSE 100 was largely unchanged this week at 6566. More broadly, the signs of a cyclical recovery are evident: oil price rose through $50 a barrel and copper and other industrial commodities have also been strong. Airbnb IPO’ed with the shares closing on their first day […]

Nichols: More than Vimto

Having prospected for investments in the soft drinks industry, I think Nichols is perhaps the most intriguing of quite an interesting group. It has been enormously profitable and a steady grower, unlike the other candidate, Fever-Tree, which has experienced both extraordinary profit and extraordinary growth. Fever-Tree makes me nervous. Explosive growers rarely keep growing rapidly […]

Weekly Commentary: 07/12/20 – Vaccine inoculating risk tolerance

The best performing FTSE 100 stock last week was Rolls Royce, up 19%. The worst was Unilever down 6.5%, which suggests expectations of a vaccine are inoculating investors against risk. On Nasdaq, the vaccine stock Moderna, was the best performing up 44% in the last 5 days, while Zoom was the second worst performing down […]

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