Member Info for rivaldo

In today's IC, Algy Hall has run a screen covering the entire TSE small cap index and AIM to find which companies pass all the stringent tests below to qualify as a "High Quality" share.

Only 5 companies passed. RNWH are one of them (MWE, which I also hold, are another):

Https://www.investorschronicle.co.uk/ideas/2021/08/26/5-high-quality-aim-shares/

"The full screening criteria:

PE ratio above bottom fifth and below top fifth of all stocks screened.
A genuine value (GV) ratio below the top quarter of stocks screened.

GV ratio = (enterprise value/operating profit)/(forecast EPS growth + dividend
yield)

Earnings growth forecast in each of the next two financial years.
Interest cover of five times or more.
Positive free cash flow.
Market capitalisation over £20m.
A top-quarter return on equity (RoE) in each of the past three years.
A top-quarter operating margin in each of the past three years.
Operating profit growth over the past three years"

CAPD have been tipped in this podcast posted on Stockopedia by Mark Simpson, described as "a private investor, market commentator, and author of the popular book Excellent Investing: How to Build a Winning Portfolio".

Apparently CAPD is the largest holding in his portfolio:

Https://app.stockopedia.com/content/thesis-for-investing-in-finncap-and-capital-858514?order=createdAt&sort=asc&mode=unthreaded

If like me you're not a Stocko subscriber, I managed to listen to it here (it's the latest episode - the CAPD discussion is around 9 minutes in):

Https://capitalemployed.fm/

The slow crawl upwards continues....and we have news :o))

Https://www.cssgplc.com/2021/08/croma-proception-the-right-solution-for-the-right-time./

Danske Bank have bought almost another 900,000 shares and are now above 4% at 3.98m shares - perhaps now we know why the share price was marked down so quickly and easily (i.e to accommodate Danske's buying).....

https://www.investegate.co.uk/sdi-group-plc/rns/holding-s--in-company/202108260945008787J/

The moves up yesterday and today on relatively light volumes hopefully indicate that the seller(s)/profit-takers are now out.

The spread remains relatively attractive at present at 1300p-1350p compared to the usual 100p or so.

The current 1350p offer price is less than the NAV per share at 31/12/20 of 1365p (which is all tangible NAV).

So anyone buying at these prices are not only buying at less than tangible NAV, but they're also effectively getting the trading businesses of Shire Foods and Indulgence Pattiserie for free (since there's no value for these businesses in the NAV except their tangible assets)!

There was a useful summary of the AGM from a poster elsewhere:

"The deal flow seemed steady and they made 3-5 offers in the last 12 months which was comparable to the year before. At least one was a complementary food business and another was a niche listed industrial business with an ageing Board and it sounded like that deal wasn’t entirely dead. With furlough and rent and rates holidays coming to an end they thought opportunities will significantly increase as Boards will be forced to confront going concern issues. Much optimism about “Naughty Vegan” and if I heard it right Nick Lander is a vegan. Meeting lasted little more than 20 minutes."

This from Reuters suggests that Allied Gold are actually looking to IPO this year, which would be very good news:

Https://www.reuters.com/article/us-allied-gold-orion-ipo/africa-focused-miner-allied-gold-readies-for-london-listing-sources-idUSKCN2DD3Q5

Https://masterinvestor.co.uk/equities/mid-week-small-cap-round-up-featuring-sureserve-up-global-sourcing-and-vertu-motors/

"Sureserve Group (LON:SUR) – not to be underestimated

The Guinness Partnership, a large national provider of social housing that owns and manages more than 65,000 homes throughout England, has been a long-standing client for this compliance and energy services provider.

Earlier this week the group announced an extension of their gas servicing, repair and installation contract with Guinness, which is expected to generate a revenue of £140m over the next ten years.

This excellent news took the group’s shares briefly up to 100.49p before they eased back to the current 95.5p.

Analyst Alastair Stewart at Shore Capital, brokers to the company, is looking for the year to end September to see revenues up from £195.7m to £243.1m, while adjusted pre-tax profits could rise from £9.4m to £12.9m, with earnings increasing from 4.9p to 6.6p, covering a 1.5p dividend per share (1.0p).

For next year he estimates £264m revenues, £15.4m profits, 7.8p earnings and a well-covered 2.0p dividend.

He rates the shares as having compelling value to the growth and earnings quality.

There should be a post-year end Trading Update announced in early October

This stock, which has been a cracking performer since the beginning of last year, should not be underestimated."

Interesting article featured today on FT Alphaville - the water shortages have begun.

MWE's prowess in managing and distributing water will become more and more necessary:

Https://www.esquire.com/news-politics/politics/a37329315/arizona-water-shortage-colorado-river-lake-mead/?utm_medium=social-media&utm_campaign=socialflowTWESQ&utm_source=twitter&src=socialflowTW

Featured here with broker comment on the "compelling" valuation:

Https://www.proactiveinvestors.co.uk/companies/news/958389/sureserve-valuation-compelling-after-guinness-partnership-renewal-958389.html

"Sureserve valuation compelling after Guinness Partnership renewal

Guinness Partnership is one of the UK’s leading owners of social housing

Sureserve Group PLC (AIM:SUR)’s extension of its multi-year gas service contract by up to 10 years with its long-standing client The Guinness Partnership underlines the growing quality of earnings, says Shore Cap.

Guinness Partnership is one of the UK’s leading owners of social housing and although forecasts are not changed, this major contract renewal underpins the existing estimates said Shore.

Given the long-term growth and earnings quality, the valuation remains compelling says house broker Shore at 11.6 times forward earnings and free cash flow yield of 6.3% despite the shares more than doubling."

As outlined in today's presentation, CAPD expect Allied Gold Corp to IPO in the next 12 months, probably early next year.

A poster elsewhere has confirmed that CAPD's investment in Allied alone could be worth $20m - this would take CAPD's investment portfolio to a total of not far off £50m - this against a total m/cap of just £156m.

Here's his summary of CAPD's investment portfolio and the potential Allied Gold IPO:

"The listed stakes are worth just over $30m, despite some selling down of some of the stakes, (although some cash has been put back into PDI.)

The unlisted, which is mainly Allied Gold, was valued at $10.9m but may well have increased in value. Allied are looking to list in London later this year so we may well get a market value for that going forward. They are looking to raise at least $500m to fund their expansion plans which suggest that CAPD's 2% (IIRC) cannot be worth less than $10m and is probably closer to $20m (assuming the raise & listing goes ahead as planned)."

The presentation was very, very buoyant and confident about all areas of the business.

The CEO's view was that the business could get to $500m revenue, of which about 50% would be non-drilling.

It was confidently expressed a few times that they believe their industry (or customers in particular) are in the early-stages of the positive cycle given that there had been a decade of under-investment by those customers.

Good to hear that CAPD are looking to expand and diversify into mining for rare earths/battery metals etc like lithium.

Also encouraging to hear too that the $3m plus value (anyne know precisely how much?) in the large unlisted investment in Allied Gold Corp is likely to be crystallised via an IPO in the next 12 months.

IMO the current share price is EXTREMELY undervalued.

...yet still so much upside considering KAPE are on a prospective P/E of only 14 or so, which is incredibly low given its high profile within the cybersecurity sector and with such high recurring revenues.

Quick reminder - CAPD's InvestorMeet presentation is at 9.00 this morning.

New post explaining how INSE can reduce companies' energy bills by:

- timing energy purchase
- increasing efficiency/reducing waste
- checking bills

Https://inspiredenergy.co.uk/three-reasons-why-your-businesss-energy-bills-are-so-high/

Consolidating nicely - ready for another burst upwards perhaps.

We know the H1 results in mid-September will be strong given the trading update. I suspect another acquisition isn't far away too if all goes well.

Very nice bounce - will SDI end up blue today I wonder.

Looks like a rather badly handled and hasty series of sells from roughly 9.30-10.30 caused the drop? Which it seems many are taking as a buying opportunity.

Great to see SUR getting a section of their own in tomorrow's Daily Mail market report:

https://www.thisismoney.co.uk/money/markets/article-9920089/MARKET-REPORT-Abingdon-antibody-test-gets-marks.html

"Stock Watch - Sureserve

Sureserve started the week on the front foot after it signed a 10-year contract extension with social housing group The Guinness Partnership.

Sureserve, formerly known as Lakehouse, will provide gas maintenance services in London and the South East for the group, which owns and manages more than 65,000 homes throughout England.

The deal is for a minimum of five and a maximum of 10 years, the firm said.

If it runs for the full term, Sureserve estimates it will generate £140 million in revenue.

Shares in the AIM-listed company rose 6.6 per cent, or 6p, to 97p yesterday."

News just up on WIN's web site:

Https://www.wincanton.co.uk/news-and-media/press-releases/wincanton-announces-major-contract-extension-bae-systems/

"Wincanton, the largest UK-based supply chain business, has extended its framework agreement with BAE Systems, a provider of technology-led defence, aerospace and security solutions, for five-years.

The contract extension builds on existing services provided by Wincanton for BAE Systems, incorporating supply chain solutions across its Air Sector and UK shipbuilding operations, extending a 23-year relationship.

Wincanton will continue to provide transport, warehousing, materials management, packing and inspection services to BAE Systems, underpinned by the delivery of continuous operational improvement and efficiencies.

etc"

Good coverage of the confident AGM statement in the Scottish Herald:

Https://www.heraldscotland.com/business_hq/19525374.calnex-continues-cashing-demand-mobile-data/

And in The Times:

Https://www.thetimes.co.uk/article/calnex-reports-strong-trading-w0f0w836w

"Calnex reports strong trading

Calnex Solutions has said telecoms customers are continuing to spend as it highlighted a strong order book.

The company, which provides testing and measuring equipment, said at its annual meeting that it was seeing good adoption of new products in the three months to the end of June, the first quarter of its new financial year.

It pointed to the upgrading of networks which is taking place to handle greater data needs because of the shift to cloud computing and the impending roll-out of 5G mobile.

Calnex believes its Field Sync product has a “unique ability” to test 5G networks. It had continued its “strong” trading and “good order” levels in the first quarter of the 2022 financial year, in line with its expectations."

Shore Capital retain their forecasts of 7.8p EPS for the year starting in just over a month, with 8.4p EPS the next year, but now with even greater confidence.

They say:

"Compelling mix of growth and sustainability: Both divisions offer, in our view, high revenue visibility from typically three- to five-year contracts: Compliance underpinned by the regulatory necessity to monitor the safety of gas and other utilities in social housing; and Energy Services by national and local government commitments to carbon reduction, see Energy Supplement, 9 March."

And they summarise:

"Although we are not changing our financial projections, we believe major contract renewals of this nature underpin our estimates and, importantly, improve the quality of earnings. Given the long-term growth and earnings quality, we believe the valuation remains compelling, at an FY22F P/E of 11.6x and FCF yield of 6.3% despite more than doubling."