Member Info for rivaldo

Hi Jjones001, thx re the comment, appreciated.

As regards where to reinvest, I'd split some of my current best prospects into three.

There are microcaps like TST, DKL, REAT and SYS. These have all recently announced good news and have rather good prospects as well as being good value on low current or prospective P/E's despite being microcaps imho.

Then there are larger companies such as RNWH, CAPD, MWE and CNIC, which again are all on very low P/E's, have terrific cash flows and have excellent upside potential.

Finally there are companies which are exciting and are either on a slightly higher P/E, but have terrific management and have proven themselves over many years, like SDI, or are exciting as they're on the cusp of a transformational change in revenues and profitability, like SCE.

Boring stuff - please DYOR on all these companies!

TST gave a really encouraging and optimistic presentation yesterday via WH Ireland.

My notes in no particular order (hopefully transcribed correctly in haste!):

- the order book at 28th March is now £2m, up from £1.74m at 31st December
- they're "comfortable" with expectations per WH Ireland's forecasts through to 2025
- they're "seeing an uplift in new customers"
- there are "high barriers to entry"
- ARR is expected to grow a further 14% this year via increasing software revenues
- they're "gaining traction" with export opportunities. Expansion into Cyprus & Turkey has begun - they've met with two suppliers and one in the distribution sector has already committed to a £200k order. Greece is also on the agenda, and DCC in Denmark have also agreed an order recently
- these countries are "low hanging fruit" as their markets are less developed, whilst France and Germany are more dveeloped and less easily entered. However, TST are having conversations with companies to partner in the USA
- margin improvement should continue
- the fuel sector is in the middle of a sector upgrade and is "buoyant". This is largely due to the need to upgrade outdated Windows systems/software. TST have a 70% share of the UK fuel delivery market. Half of their customers have already upgraded, and the other half will do so in the next 2-3 years
- each upgrade tends to double prior revenues, i.e one customer is moving in June/July from £160k per annum revenues to £320k per annum as their software is upgraded. And TST are also growing non-fuel related business
- there's a "lot of organic growth" at present, so whilst they've looked at acquisitions and will continue to do so for reasons of geography or new sector entry, these are not a "must-do"
- there could be a return of surplus cash to shareholders after the AGM (no further details given)
- Ian is retiring (and is stepping back from his other interests too) when he finds a suitable successor as (1) he's old! and (2) his speciality is the cloud etc, whereas he sees the next gen of software as being intelligent/AI-governed and he sees a younger person with knowledge in this area as being more useful to TST
- Ian noted that TST has "incredible potential"

Nice rise - hopefully just the start.

Ken Wooton (fund manager at Strategic Equity Capital (SEC)) has been a big fan of INSE and SEC is a large holder. He's had a big win this week with the takeover of MGP, which was his second biggest holding - hopefully he'll now buy some more INSE!

And another interesting post on LinkedIn yesterday from the CEO re Petrel:

Https://www.linkedin.com/in/steve-shore-57382a3a/recent-activity/

Firstly from the Group CEO:

"Kevin Price • Group Chief Executive Officer at Chamberlin Plc

Petrel, our Hazardous area lighting division, is looking to expand its sales force as we continue to drive our growth strategy and build on the excellent progress made over the last 12 months.
We have recently added our first European Sales Engineer to the
business. We can now really push forward with our plans to expand our export offering.
The team at Petrel are also recruiting for a UK Sales Engineer (North England/Scotland). If you have experience in ATEX/Hazardous Area equipment sales please contact Mark Pemberton - markpemberton@petrel-ex.co.uk"

Rising nicely today and every day this week. I'm guessing that our new major shareholder is buying more.

But still lots of upside to Zeus Capital's 61p valuation.

"Rishi Sunak hails Netflix’s $6bn spend in UK as new shows are revealed

Rishi Sunak has hailed the impact of Netflix on job creation in the UK as the US streaming service said it expected to have spent almost $6bn making TV shows and films in Britain in the four years to the end of 2023. It now spends $1.5bn a year on new productions, up from $1bn in 2020 and the $500m ploughed into 50 shows and films the previous year. The BBC spent £1.8bn on making shows last year. Anne Mensah, Netflix’s UK vice-president of content, said that the business would end up having invested 50% more over the four years than the $4bn initially projected":

Https://www.thetimes.co.uk/article/rishi-sunak-hails-netflixs-6bn-spend-in-uk-as-new-shows-are-revealed-jd8tk3s07

Good to see TST is much more liquid at present, and looking encouraging online - you can only buy a maximum 10k at 106.85p, whereas you can sell 25k at 96p.

CAPD's holding in Golden Rim is edging up slowly, with more good drilling results - CAPD are the contractor and there's lots more drilling going on until the end of May:

Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02657229-3A616936?access_token=83ff96335c2d45a094df02a206a39ff4

CAPD also drill for Desert Gold in Mail, where DG have announced further encouraging news:

Https://money.tmx.com/en/quote/DAU/news/8054647050192465/New_2680_ppb_GoldinAuger_Value_Highlights_Additional_Potential_for_Expansion_of_Desert_Golds_Mogoyafara_South_Gold_Deposit_in_Western_Mali

"Next steps will be to follow up with drilling on these new high priority auger targets as soon as possible."

Great to see news of the Court approval which opens the way for dividends and/or share buybacks here.

And the AGM update on May 22nd should read well given the "buoyant" order book and trading momentum:

Https://uk.advfn.com/stock-market/london/touchstar-TST/share-news/Touchstar-PLC-Capital-Reduction/90855332

Berenberg have retained their Buy and 250p target price:

Https://www.sharecast.com/equity/Centralnic_Group/broker-views

News today of an upgrade contract win which will benefit this coming H2:

Https://www.touchstar.co.uk/blog/carnegiefuels

Extracts:

"Carnegie Fuels - upgrade to Touchstar Android devices
25 April 2023"

"Carnegie began its relationship with TouchStar in 2017 when they were looking for an improvement to their paper ticketing system. TouchStar focuses on providing practical and effective business solutions, through its FuelStar hardware and software technology to eliminate paperwork and streamline communications between drivers and administrative teams. Carnegie Fuels adopted software from Fuelsoft as their back-end administration package and utilised Touchstar’s Fuelstar app and Windows-based Hawk devices to provide a real-time data feed from the vehicle fleet.

Every vehicle in their fuel distribution fleet uses TouchStar technology as an integral part of their delivery processes."

"The Upgrade

TouchStar has now been commissioned to upgrade the entire Carnegie fleet from the Windows operating system to Android. The vehicles will be equipped with the latest generation TS3300 device. Suitable even for the most rigorous use in the most extreme conditions, the TS3300 is fully compliant with the ATEX IECEx directive, allowing safe use in potentially explosive environments.

The TS3300 also utilizes front and rear-facing cameras and a glare proof 7” high-resolution screen, suitable for use with gloves. Slimmer, smarter and stronger than its predecessors, the TouchStar TS3300 is now the most widely adopted mobile device in the fuel delivery sector.

The Carnegie transition to FuelStar for Android will commence in July 2023."

Finncap also state that the results exceeded expectations, and they retain their 35p target price.

They've upgraded their 2023 and 2024 forecasts by 7% and 3% respectively.

They also "consider the outlook to be very positive, with the scope for upgrades high given the initiatives it is pursuing".

They conclude:

"Valuation.

Despite the pull-back in the broader AIM Healthcare index, we reiterate our 35p target price. The current price implies hVIVO is now valued at 2023 EV/Sales and EV/EBITDA of 1.5x and 9.3x, dropping to 1.3x and 7.7x in 2024, respectively. In our view, this neither reflects the estimated underlying growth, the defensive nature of the earnings, nor the strategic value of hVIVO as the only significant provider of human challenge studies to the pharma industry."

Liberum this morning note that results were ahead of expectations, and have raised their target price to 26.3p (from 25.1p). The EPS was 27% ahead of expectations.

The core business is obviously doing really well, so it would be a shame if a single contract cancellation - from which HVO benefited anyway with additional fees - and write-offs of non-core divisions which aren't in the m/cap for anything anyway obscured the progress made to date.

Today's kitchen sinking of non-core costs is certainly intriguing. It does suggest a cleaning up of the company in readiness for perhaps a sale, or simply recognising the already high securing of revenues for this year and the excellent prospoects ahead for the core business.

Ta-ra KAPE, it's been a great ride, but with a wildly frustrating ending. I finally sold this morning and truly hope Sagi gets screwed as much as he's ripped off the shareholders here. Sadly, I suspect that won't happen and we'll probably see KAPE re-listed at twice this price in the future!

PS : if anyone wants some ideas as to where to reinvest, TST, DKL, REAT and SYS have all recently announced good news and are rather good value imho, along with the likes of RNWH, CAPD, MWE and CNIC as other examples.

Good to see the bounce today.

I did like the post from the MD at RDC from a week ago posted here:

Https://www.linkedin.com/in/steve-shore-57382a3a/recent-activity/shares/

"Steve Shore 3rd+ Managing Director - Russell Ductile Castings, part of the Chamberlin Group PLC
1w •

So, the five year plan is in place for RDC, We have a strong foundation and the making of a really high quality team and individuals, I see major growth in terms of customer base and supplier partnerships, expanding shift patterns to enable RDC to produce what our customers and markets require.

We are adding to the team, the common denominator being quality positive individuals that enhance what we already have, we have technical expertise throughout RDC, hence why we are moving quickly."

Brief update today from Allenby Capital with a 90p price target:

Https://wp-allenby-2020.s3.eu-west-2.amazonaws.com/media/2023/04/Allenby-Capital-TMT-Update-24.04.23-MWE.L-TRAK.L-TERN.L-CLCO.L.pdf?c3592=on

"Allenby Capital comment:

MTI's Mottech subsidiary has a number of long-term customers in the public sector where it helps customers reduce costs and water usage. Water scarcity and the smart use and efficient management of this vital resource remains a key global consideration and Mottech has demonstrated the ability to sell into multiple geographic markets but also expand into other markets (e.g. viticulture, fountain management). Mottech offers a proven solution based on Motorola's IRRInet control, monitoring and communication technologies. No change to forecasts or 90p/share fair value, equivalent to an FY24 EV/EBITDA of 13.0x"

Singer Capital's update this morning reiterates their 1.5p target price.

They see PBT trebling to £2.1m this year (from £0.7m last year), with what looks like a resulting 0.14p EPS which matches Equity Development's forecast.

A 1.5p share price and a P/E of 10.7 looks reasonable at present. But the market will start to look forward with the 30/9 year end not that far away. If next year's forecast is say 0.18p-0.2p EPS then a share price of say 2.5p-3p as positive sentiment returns would be possible.

Https://martinflitton1.wixsite.com/privatepunter/post/sysgroup-sees-new-investor-on-board-24-04-23

An excellent new feature on SYS as ever from the Private Punter . Very useful info on the transfer of shares to our new large investor from the sellers.

If Liberum's new forecast for this year is around 3.9p EPS as suggested then it's easy to see a share price of say 47p on a modest multiple of 12.

And with only a small and improving net debt position there could soon be another earnings-enhancing acquisition too.

Chelverton Growth Trust have a £680k investment in TST as their second biggest holding, and in their interims today they state:

"Touchstar, the second largest investment, has made excellent progress in the past six months with a very positive trading statement at the end of January. The company now has a very strong balance sheet with some 40% of its market value represented by cash."

Zeus Capital today reiterate their 216p DCF valuation and 20.7c EPS for this year - and they specifically state their forecasts are "conservative".

They summarise:

"We believe CentralNic’s mix of strong growth, high revenue visibility, operating leverage and high cash conversion are undervalued by its shares’ low multiples. Shares trade at only 5x 2023 EBITDA and 7x P/E, at the bottom of the peer group range. Shares also have a 2023 FCFF yield of 15% and our DCF valuation is 216p, well above the current share price of 139.5p. In our view, the current valuation is at odds with the substantial cash generation that we forecast."

Zeus note that Online Marketing growth began to slow in Q4'22, but that they "continue to believe that CentralNic’s Online Marketing business is relatively resilient to the digital advertising downturn".

It's ridiculous that CNIC don't get any re-rating after years of outperformance and then suffer when their incredible growth rates start to slow!

I benefited from SUR's takeover approach last week. I suspect there can be no better time for an approach for CNIC than now given the weakness of sterling and the undervaluation here - and with substantial cash generation too.

Zeus conclude:

"Valuation

CentralNic shares trade at c. 40% discount to peer median EV/ EBITDA multiples and c. 60% discount to adjusted peer P/E multiples. Consensus revenue and EBITDA growth expectations for the company are slightly lower than the consensus medians but not commensurate with its large multiple discounts, in our view. We believe multiples may rise as CentralNic demonstrates its ability to at least meet earnings expectations for 2023."