Newsflash for the Snoozers - Part 11

Monday, 11th April 2016 10:29 - by Moosh

Today I present to you a range of companies which are listed on the AIM or FTSE or NASDAQ for your perusal. Add them to your watchlist if you like what you see.

Carillion (CLLN)

Final results for the year ending 31 December 2016 saw the underlying earnings per share as 35p, which means the price of 291p at market close on 8 April 2016 gives a PE ratio of ~8.3. Fair value reasonably begins at a PE ratio of 10, so there is room for price improvement up to ~350p and perhaps a little beyond if we assume the company can produce growth in the current financial year. I can’t seem to find anywhere that says the dividend has been paid yet so I assume that the record date for it hasn’t passed. In any case, I see this as a hold for up to 16 weeks.

Empyrean Energy (EME)

EME completed its sale of its Sugarloaf asset on 22 February 2016. The company actually received ~$66.3m instead of the originally anticipated amount of $61.5m, and immediately paid off various amounts to Marathon Oil and Macquarie Bank. The company awaits guidance from US tax authorities before it can pay off any US tax which is due from the disposal of the asset, and that has been suggested to happen within 90 days of 22 February 2016. Following that, there may be the prospect of a payout to shareholders. There may also be release of any surplus funds from the escrow account, as well as potential contingency payments in the future if the oil price satisfies the conditions of the contingency payments. With the Western Texas Intermediate (WTI) crude oil price rallying back up to ~$40 per barrel in the last few months, it certainly gives us some hope of success with these contingency payments. As it stands currently, the company is basically a cash shell and would be useful to take advantage of if an uptrend kicks in, especially as we get closer to a possible payout once taxes  have been paid, so for this reason I see this as a hold for up to 11 weeks.

Harvey Nash (HVN)

Full year results are expected here on 28 April 2016 and the trading update saw the company swing to a net cash position. Brokers have forecasted HVN to have growth in earnings over the next few years and the current price of 76p (market close 8 April 2016) gives a PE ratio of ~8.26 for the forecasted earnings of 9.19p per share for full year to 31 January 2016. If fair value begins at PE ratio 10 then there is room for improvement here to at least 90p. HVN also tends to issue a dividend with a reasonable yield. Given all this, I see HVN as a hold for up to 16 weeks.

 Juniper Pharmaceuticals (NASDAQ:JNP)

JNP released its final results which saw the total annual revenue come to ~$37.558m. If I assume my reasonable upper limit for buying biopharmaceutical companies equates to a tripling of the annual revenue split over the total number of shares, then I get a figure of $10.3 per share. The market close of JNP on 8 April 2016 was $7.46 so there is indeed room for improvement here. There are also the results of the COL-1077 clinical trial coming in a few months and a first quarter results statement to appear so I see this one as a hold for up to 13 weeks.

Orosur Mining (OMI)

The market has started to slowly attach its radar to OMI over the last few months – the second quarter results showed the company reduce both the operating cash costs and all-in sustaining costs per ounce of gold. Its production for the current year to date (end of Q2) is ahead of its guidance it gave to the market, and recently the gold price has headed back above $1200 and stayed there so perhaps any impact of this may present in the upcoming third quarter results. For these reasons I see this as a hold for up to 13 weeks.

Poundland (PLND)

A recent trading update for this company saw it end the third quarter with strong cash generation to give a net cash total of £35.4m. While the trading update suggests a full year profit towards the lower end of that expected by the market, I still feel PLND to be a hold for up to 15 weeks. It appears likely that the company will issue a dividend too (continuing its trend following the issue of an interim dividend). Even though PLND had once been at the heights of 300p+, I personally feel that the current price range of 150-200p is the more reasonable range for it to be in, and that’s why I refused to consider a buy at the historically inflated prices when the PE ratio was 20+.

Proton Power Systems (PPS)

PPS had its loan refinanced and is available until 31 December 2018. The company also installed the first emission free electric car charging station in Puchheim, Germany. It is interesting to see that there was 82% growth in electric vehicles and plug-in hybrids during 2015 compared to 2014, and January 2016 has already seen further growth compared to 2015 so it will be interesting to see how the market moves in the future.¹ With PPS having now sorted out an extensive range of market-ready products for various transport types, and with the infrastructure in place for potential growing demand, we now must wait to see if the market takes a long term liking to alternative energy, and more specifically, PPS. We await the results in the next month to see how PPS has been doing regarding their various projects so I see this as a hold for up to 13 weeks.

1. http://cleantechnica.com/2016/03/07/germany-ev-market-grew-86-in-2015/

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.