Don’t ignore Capital’s investment portfolio, advises Berenberg23 Oct 2023 06:36
Projects at Capital Ltd (CAPD), previously known as Capital Drilling, are on track but the market is giving no credit to its investment portfolio, says Berenberg.
Analyst Richard Hatch retained his ‘buy’ recommendation and increased the target price from 169p to 173p on the Citywire Elite Companies AA-rated mining services company, which closed unchanged at 77p last week but are down 20% this year.
A third-quarter update showed revenue slightly below Berenberg estimates, but it observed that ‘key mining and drilling projects are on track’ and the group ‘also provided an investment portfolio update, noting an increase in value by $5.7m to $47.8m’.
‘Capital’s holding of Allied Gold, which listed during the third quarter, with a market capitalisation of CAD1.3bn, was worth $10m as of 30 September,’ said Hatch.
‘Overall we view this as a steady update from Capital, but we highlight the positive investment portfolio update which is 25% of its market cap and given no credit in its valuation, in our view.’