Category: Company analysis

Screening For My Next Long-Term Winner: Curtis Banks

Curtis banks

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

SDI group

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

oxford instruments

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

ASOS

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

Merry-go-round

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 […]

Weekly Commentary: 30/11/20 – The platform bandwagon rolls on

FTSE weakened slightly to 6300 in the second half of last week, but the bounce of former “Covid losers” continued with Rolls Royce, Glencore, Shell and BP all up 8% in the last 5 days. Nasdaq continued to rise to 12152 and Tesla’s value exceeded half a trillion dollars. airbnb IPO Last week airbnb filed […]

Weekly Commentary: 23/11/20 – Expectations rising

We are beginning to see companies operating in the “real” economy announce raised guidance. Somero (exceeding previous revenue guidance by +7%), but also Headlam (materially ahead), Acesso (comfortably ahead). Saga share price was also up +57% during the week. The FTSE 100 is currently 6378, which is the same level as early March this year. […]

Screening For My Next Long-Term Winner: Manolete Partners

I am always looking for ‘multi-baggers’ — investments that can double, triple, quadruple or more. And here’s some very good news: I have stumbled on a company that can find them for me. Not just the occasional five-bagger or ten-bagger mind, but 20-baggers. It’s incredible stuff, especially as the track record of success extends for […]

Weekly Commentary: 09/11/20 – Study silence to learn the music

The US Presidential election turned out to be closer than most people expected. Nasdaq up almost +10% over the week to 12078. Tech stocks reacted well to the uncertainty, but so did 10 year US Bond yields, which initially jumped to 0.9% before falling back to 0.78%. I’m not sure if you’d predicted the result, […]

Screening For My Next Long-Term Winner: Jarvis Securities

Today I have returned to one of my favourite SharePad screens. This screen applies two ratios favoured by ‘quality’ investors — operating margin and return on equity (ROE). The main filter criteria are: 1) An operating margin (latest and 10-year average) of 20% or more, and; 2) An ROE (latest and 10-year average) of 20% […]

Weekly Commentary: 02/11/20 – Insiders selling at the top?

Last week markets sold off into the rising cases of Covid. The FTSE 100 fell 5% last week to 5561. Large UK banks HSBC and NatWest reported encouraging results, although the sector remained unloved. Directors selling Given the strength of the market’s rally over the last 6 months, and then last week’s sell off, I […]

Floored

James Halstead makes vinyl flooring, the kind we see in hospital corridors, GP surgeries, clinics, schools, offices, laboratories, prisons, factories, shops, trains and boats around the world. James Halstead’s biggest brand is Polyflor. The company’s social media accounts are a good way to get a feel for the product and you can take the Commercial […]

Weekly Commentary: 19/10/20 – On network effects and fads

“Fad companies are companies with good business models or good products. So, why would we be interested in shorting a company that has a good product? Because of the threat it presents to others and their likely response to that threat. For example, Netflix had a terrific idea of renting DVDs through the mail, which […]

Weekly Commentary: 12/10/20 – On content, distribution and kurtosis

Last week the FTSE recovered to just over 6000. The (perhaps inappropriately named) Bond film No Time to Die, was postponed until next year by its Hollywood studio, MGM, which has left cinemas in trouble. Cineworld is on the brink, a victim of an overly leveraged balance sheet but no product to distribute. Up until […]

Weekly Commentary: 05/10/20 – On uncertainty and confidence

Last week Andy Haldane at the Bank of England gave an interesting speech on “Economic Anxiety” noting that pessimism can be as contagious as the disease. Haldane is most famous for his “Dog and the Frisbee” speech, which he co-wrote with the famous psychologist Gerd Gigarenzer in 2012. Catching a frisbee is difficult; theoretically it […]

What does not kill a business can make it stronger

This article was not supposed to be about paper maker James Cropper. I set out to write about Animalcare, a veterinary pharmaceutical company, but I quickly became disillusioned, wretched even. You probably will hear about Animalcare one day, because it is an interesting business, but it is also complicated and its complicatedness was epitomised by […]

Screening For My Next Long-Term Winner: Polar Capital

I am not a great fan of the fund-management industry. I cannot think of another sector where the employees collect enormous salaries while the customers pay hefty fees and sometimes get nothing in return. Quite often us amateur investors are better off with simple index trackers rather than falling for the industry’s persuasive advisers and […]

Weekly Commentary: 28/09/20 – Beginner’s mind and Buy and Build

Markets sold off last week as virus case rises rose (FTSE 100 fell to below 5800 before recovering slightly later in the week, Nasdaq down 4% to 10,800). The virus itself seems reasonably predictable, everyone has been expecting cases to rise as summer turns to autumn. What hasn’t been predictable is Government responses around the […]

Weekly Commentary: 21/09/20 – The long journey to exoneration

The FTSE 100 just about held its level above 6000 last week. Last week was Chilean Independence Day. It is a little known footnote in history that Lord Cochrane, who was involved in the great Stock Exchange scam of 1814 (accused of starting rumours of Napoleon’s death via the Admiralty’s semaphore telegraph) helped not one, […]

This time is different for Design Group

If you watch Design Group’s annual results presentation, you may detect a bashful smile on chief executive Paul Fineman’s face. Paul Fineman, chief executive of Design Group. Source: Design Group Full Year Results 2020 (video). Despite unexpected tariffs on products imported into the USA from China and the onset of the pandemic, Design Group was […]

Screening For My Next Long-Term Winner: Fuller, Smith & Turner

First, a wealth warning. The last price-to-book ‘bargain’ I looked at for SharePad was Hammerson. Back then the property group’s £5 billion asset base could be acquired for a £1.6 billion market cap. Investors were in theory able to purchase £1 of assets for just 30p. Twelve months on, and the share price below tells […]

A safety first stock

I found James Latham a couple of months ago when I was trawling for cheap shares with strong balance sheets. The shares are still cheap, James Latham’s Price Earnings (PE) ratio is 13, and the balance sheet should remain strong… Centuries trading timber James Latham has a long and storied history. It manufactured plywood for […]

Preparing for the worst, capitalising on the best

Listening to Porvair’s long-standing chief executive Ben Stocks talk about the challenges ahead, it is clear the company is bracing itself. Phrases like “preparing for the worst, hoping for the best”, and “the overall balance is negative”, come readily to him. This is a company I have long admired, but I have never had the […]

Screening For My Next Long-Term Winner: Fever-Tree Drinks

They say mums always know best. Mine has bought Fever-Tree tonic waters for some years now and I recently asked whether she remained a customer. This was her response. “While we don’t buy many commercial drinks for home consumption these days I would still definitely buy Fever-Tree, generally the original tonic water. I went into […]

Making a new discoverIE

I discovered discoverIE using a simple and fruitful method of finding new investment ideas: a list of shares sorted in SharePad by previous annual report date. Having squinted for a few minutes at financial charts showing profitability, cashflow and debt (more on that later), I thought the company looked promising: Sorting a list in SharePad […]

A cheap profitable share with a strong balance sheet

Today I have added two more criteria to turn the list of cheap shares with strong balance sheets I made in my last article into a list of cheap profitable shares with strong balance sheets! The profitability criteria are free cash conversion and return on capital employed. This table shows the individual and aggregated rankings […]

Screening For My Next Long-Term Winner: Hikma Pharmaceuticals

One way to invest during the pandemic is to consider shares that have climbed higher as the market has dropped. Such companies may well be ‘safe havens’ — businesses that are coping well with the lockdown, or perhaps even benefitting from the crisis. I applied the following simple criteria within SharePad to identify potential ‘pandemic-proof’ […]

Putting safety first

Funny thing (peculiar, not ha! ha!). Search SharePad news for the phrase “strong balance sheet” and there are dozens of companies every day confirming their finances are strong as they reflect on the prospect of reduced, or in some cases, no revenue for a while. Search SharePad news for the phrase “weak balance sheet” though […]

Screening For My Next Long-Term Winner: AB Dynamics

Recent market ructions have sent many shares tumbling — and perhaps created some buying opportunities. Amid the mayhem, I devised a straightforward screen. I simply looked for decent-sized businesses that were still expected to grow, paid a dividend and were conservatively financed, too I applied the following criteria within SharePad to identify some respectable candidates: […]

Taking back control

Richard investigates Dialight, a supplier of industrial LED lighting that flared up ten years ago briefly setting the stock market alight, and subsequently dimmed alarmingly. What are its prospects now it is taking back control of manufacturing? Ten years ago Dialight was a feted, fast growing business in a booming industry, LED lighting, but it […]

XP POWER

Older readers may recall a distant era when electrical devices used to plug straight into the wall. Nowadays, everything electrical seems to need an annoying little box between it and the wall. That box is called a power supply and these are the business of XP Power. But not the annoying ones. XP doesn’t do […]

Screening For My Next Long-Term Winner: Boohoo

Cash flow movements can often indicate whether or not a business enjoys a powerful operational advantage. A strong business might: Receive customer payments upfront for goods/services it has yet to deliver, and/or; Pay suppliers months after goods/services have been received. However, a weak business might: Receive customer payments months after its goods/services have been delivered, […]

Screening For My Next Long-Term Winner: Greggs

‘Run your winners’ is popular stock-market advice. Great companies often remain great investments for a lot longer than most people expect… … and can deliver life-changing rewards to anyone who refrains from selling out too soon. Where can we find potential winners to run? I thought the best performing shares of 2019 would provide a […]

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