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Simon Thompson

Moulded for gains The flotation of a manufacturer of extrusions, mouldings and fabricated building products is well worth following ...

29 July 2014

Simon Thompson

About Simon Thompson

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

Recent articles

  1. Cash rich income play

    Cash rich income play

    28 July 2014

    'Shares in a high yielding Aim-traded stockbroker and financial services outsourcer offer decent upside'

    'The key performance indicators are certainly pointing in the right direction as pre-tax profit margins rose 100 basis points to 45 per cent year on year, revenue per employee increased by more than 2 per cent to £186,800 and client numbers rose by almost a quarter, exceeding the company's target of 10 per cent growth and accelerating from the 13 per cent growth in the same period of 2013.'

  2. Warning from Air Partner

    Warning from Air Partner

    28 July 2014

    Shares in a jet broker have been sent into a tail spin after a profit warning

    'Excluding the Jetcard deposits, net cash equates to 78p a share, so on a cash-adjusted basis the forward PE ratio is 19 with the shares trading on a bid-offer spread of 350p to 370p. Factoring in the whole of the company’s cash pile – equating to half of Air Parner’s market capitalisation of £38m – the prospective PE ratio is 12. True, the earnings multiple is high only because earnings are depressed, and a prospective yield of 6 per cent is supportive. That said, the company has to eat into the cash pile to make the payout as it will not be covered by cash flow given the aforementioned profit shortfall. Again this tempers my enthusiasm, as does the return of volatility of earnings'

  3. Punting on a strong recovery

    Punting on a strong recovery

    24 July 2014

    Shares in an online gaming company offer scope for a multi-week re-rating

    ‘From my lens a base formation has been formed and one that should be solid enough to support a rally to the May highs of 67p at the very least, a price level that coincides with the 200-day moving average. If that level is taken out then a return to January’s highs of 88.5p is a natural and realistic objective. The 14-day relative strength indicator is in the mid fifties so is not yet in overbought territory, thus offering scope for the rally to continue.’

  4. 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.’

  5. 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.’

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