from iii16 Oct 2015 15:41
"With many stocks fully-priced after a six-year bull run, new ideas can require more by way of anticipation – which is admittedly a speculative approach, but if economic conditions stay fairly robust then some such firms will evolve. AIM-listed Porta Communications (PTCM) is a good example.
On the stockmarket fringe, its financial record (see table) is immature, and not even the company's broker – Sanlam Securities – is anticipating profitability to date. Yet the directors keep buying significant amounts of shares, implying they are positive about prospects.
From Porta's news feed, a remarkable nine of 21 announcements this year involve the directors buying – with some trades around 9p a share, higher than the current spread of 7.75/8.0p. Included is Bob Morton, non-executive chairman who now owns nearly 15.5% and has fans and critics as a veteran smaller companies promoter. Also, the chief executive has just bought £50,000 worth of shares for his SIPP, and the finance director £45,010 worth, both at 7p, which bodes well.
Looking more closely at the company, it achieved strong organic growth in the second half of 2014 – gross profit (fee income) rose 75% to £19.4 million for the year on a continuing operations basis. When reporting prelims last May, management indicated another strong year with all its 2014 acquisitions doing well, and exceptional costs likely lower this year"