Skip to main navigation or content
You are here:
The flight from risk has dealt a particularly savage blow to the UK's smaller companies, but value remains - it just takes some searching out. Our latest number crunching shows that, to the end of last week, just three smaller companies had risen by more than 15 per cent over the past month and it appears that with all three, cash, or the promise of corporate activity, is attracting investor interest.
Advertising
Recent trading at music group Chrysalis has been far from inspiring, but the group is a perennial takeover candidate, and is still locked in talks with potential suitors. Its 21 per cent rise in a month suggests significant support for a successful takeover - brave when you consider it's only been six months since the collapse of previous talks.
The biggest riser in our search, petrol retailer GNE Group, will soon be awash with cash having agreed to sell its petrol retail business for £51.7m. This will lead to 150p a share special dividend, so investors buying at today's 175p get most of their money back and a stake in a cash shell with a proven management team with £15m to spend on petrol retailing companies in Europe. With retail shares having taken a pounding and economic conditions likely to prompt some distress selling of assets, now is a good time to be cash rich.
Finally, the Marwyn Group provides the third significant riser of the past month in Marwyn Materials. The Marwyn group has an enviable record in the smaller companies world for floating cash shells which go on to build substantial businesses before selling, often for a big return. Marwyn Materials has been set up to do the same in the building materials market. It's not an obvious growth arena, given what's happening in the property market, but the industry is fragmented and executives with strong industry experience are on board and its shares have risen 17 per cent, boosted by hopes of a deal - aggregates business Ennstone is thought to be in its sights.
Small-cap shakers
| Company | Code | Price (p) | 30D price chng % | 12M price chng % | Market Cap (£m) |
|---|---|---|---|---|---|
| GNE | GNE | 175p | 39 | 83 | £25m |
| Marwyn | MMAT | 18.5p | 18 | na | £25m |
| Chrysalis | CHS | 113.3p | 15 | 8 | £190m |
On the downside, 47 companies in our £20m-£100m market cap universe suffered falls of 50 per cent or more in the past month. One prominent group of casualties are soft commodity stocks. These were booming earlier in the year, but as commodity prices have corrected, share price have tumbled. Ukrainian wheat and oil seed rape grower Landkom has shed 64 per cent of its value and Chinese orange grower Asian Citrus is off 60 per cent, as investors react to the prospect of a prolonged economic slowdown and recent commodity price falls.
Although small resources companies have fallen much harder than their larger counterparts, value is more difficult to find, according to one resources fund manager we spoke to. It is crucial that not only is the asset a good one but, more importantly, that the miner is pretty much entering, or has commenced, production, and funding from either the equity or debt markets, isn't needed. Companies in this position include Finish nickel miner Talvivaara, gold miner Centamin Egypt and Platinum Australia.
Small-cap quakers
| Company | Code | Price p | 30D price chng % | 12M price chng % | Market Cap (£m) |
|---|---|---|---|---|---|
| JJB Sports | JJB | 17.5p | -85 | -90 | £42m |
| Bateman Litwin | BNLN | 15.5p | -80 | -94 | £17.4m |
| Dawnay Day Treveria | DTR | €7.0c | -74 | -93 | €44m |
| Mwana Africa | MWA | 7.0p | -73 | -88 | £28m |
| Landkom | LKI | 15.3p | -61 | -74 | £30.5m |
| Asian Citrus | ACHL | 85.0p | -60 | -67 | £82m |
| Platinum Australia | PLAA | 35.5p | -57 | -61 | £78m |
| Centamin Egypt | CEY | 27.3p | -41 | -57 | £239m |
SMALL CAP MOVERS & SHAKERS is a regular online column devoted to seeking out shares with genuine underlying price momentum, not just those that are zipping up and down every day.
You can view shares making new lows and highs, along with a host of other metrics, at our MARKETS CONSOLE. For more sophisticated searches, you can use our STOCK SCREENING TOOL - although you'll have to register (it's free) first.
If there are any shares you think we should be keepng an eye on, LET US KNOW via the Your Opinion page!
The UK’s No.1 Stockbroker
Access a selection of share tips, comprehensive company analysis and full financial data on listed companies. Plus portfolio tools with advanced alerts when you register for free here.
Advertorial Feature
With so many big moves in the world's financial markets, there have seldom been more opportunities around for spread traders. Isn't it time you joined them?
by Dominic Picarda
© The Financial Times Limited 2008. All rights reserved. "Investors Chronicle", "FT" and "Financial Times" are trademarks of The Financial Times Limited. No part of these web pages may be reproduced or transmitted to or stored in any other website or other form of electronic retrieval system, without prior permission in writing from the editor.
Warning: Do remember, particularly if you are new to stock market investment that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions. Take independent advice before making such decisions. This site is aimed at UK residents only. To read more please see our Important Warning
-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
