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Simon Thompson

Punting on a strong recovery Shares in an online gaming company offer scope for a multi-week re-rating ...

24 July 2014

Simon Thompson

About Simon Thompson

Winning stock and trading ideas from the creator of the Bargain Portfolio

Recent articles

  1. Exploiting a share buy-back programme

    Exploiting a share buy-back programme

    23 July 2014

    ‘The board of a small cap property company are playing a shrewd hand and one not yet priced in’

    ‘The board have taken note and ahead of entering a close period, they have appointed broking house Liberum Capital to manage a share buy-back programme on their behalf. The brokerage has the authority, following shareholder approval at last November’s annual meeting, to purchase up to 7.6 per cent of the issued share capital. It makes sense too as any purchases will enhance net asset value per share on the outstanding 81.4m shares in issue. In turn, this can only underpin the share price and deliver further increases in book value per share.’

  2. Sell-off unjustified

    Sell-off unjustified

    23 July 2014

    ‘The sell-off in shares of a chip maker is a massive over-reaction.’

    ‘The good news is that despite these headwinds, cash profits are up 5 per cent and with the benefit of cost savings, a change in the sales mix to higher margin products, and synergy benefits from acquisitions, the company is still on course to achieve analysts' full-year earnings expectations. Analysts expect adjusted EPS to grow by 10 per cent to 2.2p. On this basis, the shares trade on a modest 9 times current year forward earnings, around half the rating of rival Visual Photonics Epitaxy and wireless customers RF Micro Devices.’

  3. Buy the break-out

    Buy the break-out

    22 July 2014

    Shares in an Aim-traded small cap software company look poised to break-out

    'It's my view that the conservative looking earnings estimates for the year ahead offer potential for an earnings beat. There are realistic prospects of a better than forecast dividend hike too. Add to that potential for more earnings enhancing bolt-on acquisitions and the investment case is as solid as it ever has been, a fact not fully factored into the current share price. That's because the company is still only being valued on 12 times prospective cash profits for fiscal 2015.'

  4. Broking for bumper profits

    Broking for bumper profits

    21 July 2014

    Profits in a small cap fund manager and stock broker have soared making the shares seriously undervalued

    'This growth potential has yet to be reflected in the share price and the undervaluation becomes even more pronounced when you consider that the company has over £1m of cash surplus to regulatory requirements and also £3m equity in its Manchester head office. On this basis, the wealth management business alone could be worth £36m, or 40 per cent more than the company’s own market value.'

  5. Exploit value opportunity

    Exploit value opportunity

    21 July 2014

    Shares in a small-cap support services company have been unfairly derated and are worth buying ahead of half-year results

    'In other words, the prospective PE ratio is only eight for 2014, a modest valuation for a recovery play and one doing smart strategic deals in what is a consolidating industry. There is a dividend support, too. Analysts predict the dividend will rise 31 per cent to 3.8p a share this year, covered more than twice over by post-tax earnings. On that basis, a forward yield of 5.5 per cent is clearly attractive'

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