Share Name Share Symbol Market Type Share ISIN Share Description
Upstream LSE:UPS London Ordinary Share KYG7393S1012 ORD 0.25P (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 1.625p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
6.3 0.4 21.9 0.1 2.23

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DateSubject
20/2/2017
10:00
master rsi: VAST 0.56p +0.12 +27.27% Letter to Shareholders Vast Resources plc, the AIM listed mining company with operations in Romania and Zimbabwe, is pleased to announce that a letter to shareholders has been posted on the Company's website at www.vastresourcesplc.com. The purpose of the letter to shareholders is to introduce a new programme of shareholder communication and to highlight the benefit of recent developments to new and existing investors. OVERVIEW The recent strategic investment by the SSCG Africa Holdings Ltd group ("SSA"), providing gross proceeds of US$8 million to Vast as announced on 30 January 2017, has fundamentally changed the Company The Board foresee that Vast is now fully-funded through to positive cash flow* at the Manaila Polymetallic Mine ("Manaila") and the Baita Plai Polymetallic Mine ("Baita Plai"), once the relevant licence is granted The Board see that there is no current need to issue new equity during 2017 2017 to be punctuated with regular operational developments charting progress across the Company's portfolio of interests To reflect the evolving investment proposition of Vast, and to ensure all shareholders are communicated with in a professional manner, the Board are launching a new Vast communications programme The communications programme is intended to deliver regular and reliable news flow, in addition to providing shareholders with established channels through which to ask questions, raise concerns and provide feedback * when all conditions precedent have been fulfilled and all the cash is received from SSA A text only version of the letter to shareholders is copied below for shareholders' reference: Dear Vast Shareholder, Although only in our second month of the year, 2017 has already been an active and exciting year for Vast. The strategic investment by the SSCG Africa Holdings Ltd group has fundamentally reshaped the near-term outlook for the Company, and for this reason I wanted to provide shareholders with a better sense of where I believe Vast is headed over the course of the year. A New Phase of Growth. In my statement on 30 January, I advised you that the SSA transaction "heralds a new phase of growth for Vast" - I strongly believe this to be true and in this letter I want to provide context and colour around this statement. In addition to removing the concerns of shareholders regarding emergency equity raisings, the capital derived from the SSA transaction provides shareholders with comfort that Vast is now positioned to achieve positive cash flow at Manaila and Baita Plai (once the necessary licence is granted) without further equity raises. Any future fund raising activities will need to be demonstrably beneficial to shareholders and the growth of the Company, therefore shielding investors to unnecessary or value destructive dilution. I know that further dilution has been a primary concern for many long-term holders, so I want to be clear when I say that the Board's primary focus is on building a business which offers shareholders material value increases in the long-term through sustainable and organic growth. As longer term shareholders will be aware, Vast has not always had this level of security over finance, and the Company agreed to two equity draw down facilities in 2016. Not only did these facilities create significant dilution in the year, but it is my belief that the market perceives that an overhang, derived from these two facilities, persists which is curbing the progression of the share price. After detailed shareholder analysis by our registrar, I can confirm that these two entities hold no residual holdings in Vast stock and I am therefore confident that neither party represents a threat to the progress of the share price henceforth. One of these parties does have 50,000,000 warrants exercisable at 0.4p which expire in October 2019, which only represent just over 1% of the currently issued share capital of the Company. Professional & Reliable Communication. The appointment of our new nominated adviser last month, together with our reinvigorated investment case post-SSA transaction, has prompted us and our advisory group to introduce a new investor communication programme, which is aimed at giving shareholders frequent and reliable news flow combined with regular access to the Board and management. In addition to our regulatory announcement responsibilities, Vast will continue to report quarterly operational activity by way of a quarterly production report. In the past, Vast has reported on various financial aspects relating to each operation, and the complexity of this has made subscribing to a strict reporting calendar difficult. In order to resolve this, Vast will publish production figures only and these will be issued to the market within four weeks of the end of the period. The Board and its advisers believe that this will be a more useful tool in keeping investors abreast of developments - rather than waiting up to ten weeks for all the relevant information to be approved by the appropriate parties. The Company will of course continue to issue all financial results, including production and financial operating data for each mine, in its half-yearly report and annual audited accounts. The financial details will however be disclosed in the next quarterly report, due to be announced on Tuesday 21 February, as adequate time has elapsed for these to be accurately calculated. The Board would also like to introduce a rationalised structure for ad hoc communication between the directors, management and shareholders. This investor relations policy will include the following: Quarterly shareholder conference calls: details of which will be found in the Quarterly Production Reports announced to the market - during the call, shareholders will have the opportunity to ask questions via an online chat function. Shareholders can also submit questions to the Board via email in advance of the call to St Brides Partners at shareholderenquiries@stbridespartners.co.uk. The first shareholder call will be held in conjunction with the release of the next quarterly production report scheduled on Tuesday 21 February. Q & A documents: shareholders will be invited to email questions to the Board which will be accumulated into Q & A documents and regularly posted on the Vast website and announced to the market - please send any questions through to St Brides Partners who will be compiling this on behalf of the Company (shareholderenquirie[email protected]o.uk). Private Investor Events: new and existing shareholders will be invited to exclusive Vast Investor Evenings where members of the Board will provide a presentation and be available to answer questions. The first of these evenings will be announced to the market shortly. A Final Word. After 18 months of challenging times for Vast shareholders, we intend to rebuild credibility, trust and excitement in the Vast investment proposition for the benefit of all stakeholders. I am confident that over the course of 2017, when combined with the continued operational turnaround in Romania, this will be achieved. Whilst the Board and its advisers continue to monitor the share price constantly, it is the Board's responsibility to build the business, which ultimately should be reflected in the share price moving forward. The Company's advisers will be active in communicating the progress on the ground within the investment community. All parties concerned, be they directors, managers or advisers, are fully committed and aligned with the success of Vast and we are focussed on establishing a significant, profitable and sustainable mining company with a robust communications strategy moving forward. Brian Moritz Chairman
19/2/2017
21:43
master rsi: Five AIM shares with hidden gems - By Andrew Hore | Fri, 17th February 2017 - 13:38 Some AIM companies have parts of their business that are hidden stars, or new parts of their business that have potential to become highly valuable. However, this is not necessarily fully reflected in the share price. This can provide a great opportunity for investors to become involved when the existing business itself is attractively valued, even without that potential upside. Here are five examples of companies where parts of their businesses that make a small, or no, contribution could become significant. However, there is no guarantee that they will. Cello 115.5p Market research and marketing services provider Cello (CLL) has a strong position in the healthcare market, in particular, and it can continue to build these operations. The possible additional upside comes from the technology products that Cello has developed to enhance its services and productivity. Cello Pulsar is a social media analytics product which is different to anything that rival marketing services groups can offer. The product enables social media data to be collected so marketing campaigns can be optimised. It is still early days but Cello did highlight Pulsar's progress in its January trading statement. Pulsar is making a profit contribution and it is being offered in the US. It has only scratched the surface of the potential market. An online community of physicians, patients and other health sector participants developed by Cello is called eVilliage. It has been in operation since 2011, but it has become available on a wider range of devices. The eVillage service can be used by researchers to build up a wider understanding when making clinical decisions. Cello also has a customer relationship management tool called TriggerHub. This enables the client to use data it has obtained to develop and target clients in a number of different targeted ways, rather than one identical email/mailshot to everyone. A recent fundraising has diluted Cello's earnings per share, but the cash is expected to be used on acquisitions in the near-future. These will enhance earnings and possibly provide further avenues for growing the technology products. As a standalone business the technology products of Cello could expect a significant valuation, but there is nothing in Cello's valuation for this area of the business. Mortice Ltd 93.5p Mortice (MORT) is known as a manned guarding and facilities management services provider, originally focused on the Indian market but is expanding into other countries including the UK. By its nature, this type of business does not have high margins. In contrast, security surveillance business Soteria has the potential to become highly profitable once its fixed costs are covered by revenues. Soteria was launched in the middle of 2014 and the business is still being built up. The control centre uses IBM technology and offers real-time surveillance, and the predictive capability of the technology can highlight any unusual activity helping to stop or prevent unwanted events. Mortice invested $1 million in the first control centre in Gurgaon, India and the existing building could house two other control centres, but it will not cost as much to set them up. One of the attractions of this business is that it does not have to be sited in the part of the world that is being monitored. Soteria is part of the guarding division and its figures are not split out. Revenues are generated by charging a monthly fee based on the number of monitors included in the surveillance. Soteria is expected to move into profit in 2018. The recent £2.3 million at 75p a share was partly for cash to finance the marketing of Soteria in the UK. There are already clients in the UK and US, and Soteria could become a high-margin, high-growth international business. Private & Commercial Finance 25.25p It took small business and car finance provider Private & Commercial Finance (PCF) two years to get a banking licence, and it finally got confirmation of its success at the end of 2016. It cost around £550,000 in the two years to September 2016 to obtain the licence and it will cost more to build up the governance and technology infrastructure this year. The banking licence enables Private & Commercial to take deposits and this will finance further expansion of its core business. The first deposits are likely to be taken in the third quarter of this year. Meanwhile, there are plenty of spare bank facilities to cope with growth until then. It could cost £1.5 million in this financial year to set up the bank and the benefits will not really show through until 2018-19. The group has a strong position because it is already profitable and it can cope with these additional costs. Private & Commercial made a pre-tax profit of £4 million in the year to September 2016 and, even with the increased cost base, this year's profit could be similar. Private & Commercial will need to raise additional funds to make sure that it has the required regulatory capital. This could be between £10 million and £20 million and could be dilutive, given the current capitalisation of the finance provider. The cost of the funding provided via the bank deposits will be lower than the costs of the current bank facilities. This will enhance margins and/or enable the company to go after business that might not have provided sufficient margin in the past. Once the bank is up and running, the profit could rise to £5.2 million next year with the real benefits showing through in 2018-19 when a profit of £8 million is forecast. Longer-term, this new source of finance could help Private & Commercial move into new finance areas. Proactis 167.5p Proactis (PHD) makes its money from selling spend control and e-procurement software to businesses and government. Proactis is trying to further develop its recurring revenues by offering a supplier network service. This means that trading can be done on a paperless basis via an online portal, making transactions more transparent. Proactis has around 800 purchasing clients and they have more than one million suppliers so the supplier network is a way of generating revenues from the suppliers. The company is also offering an accelerated payment facility where the client can offer suppliers faster payments if they offer a discount. This faster payment is offered via a third party finance provider and Proactis would earn a share of fees. Flintshire County Council, P&O Ferrymasters and Screwfix have signed up to the supplier network service. Flintshire is the first to start signing up suppliers to the service. These suppliers pay a fixed annual fee to become members – possibly around £50/year. Acquisitions, such as the recently purchased public sector tender services business Millstream Associates, provide additional services that can be offered via the service network as well as providing additional cross-selling opportunities. It also adds clients with thousands of suppliers. Proactis has capacity for multi-currencies and languages so the supplier network service can be offered outside of the UK. The forecasts for this year assume supplier network revenues of £1 million (possibly 20,000 suppliers) out of group revenues of £26 million. House broker finnCap believes that there could be 10 large customers by the end of July 2018. They will not all be fully up and running, but this customer base would provide significant future revenues and make the supplier network service an increasing part of the business. The current share price barely reflects the prospects for the core business and does not take any account of the growth for the supplier network service. Draper Esprit 348.5p Venture capital investor Draper Esprit (GROW) does not really have hidden gems as such because the portfolio is obtainable and investors' can assess the constituents. However, Draper Esprit offers exposure to potential upside from individual companies with a reduced risk because of the portfolio. One of the larger investments is global review community business TrustPilot, where Draper Esprit has invested £11 million in three tranches, including £5.5 million in January. The previous investment had almost doubled in value to £9.4 million by September 2016 and it represented 9% of the portfolio at that time. TrustPilot was formed in 2007 and Draper Esprit became involved in 2011. Although it operates in 65 countries the current focus is building up a presence in the US. Healthy snacks provider Graze is another high profile investee company. The focus is companies that could become significant global businesses rather than those focused on local markets. Draper Esprit has grown over more than one decade and it has portfolio with companies at a range of levels of development. This enables it to sell maturing investments and reinvest in newer ones. The shares are trading at around NAV at the end of September 2016.
26/1/2017
23:18
master rsi: Profits warnings and how to predict them / By Lee Wild | Thu, 26th January 2017 - 13:45 When I began writing this article, I had in mind ugly profit warnings from Pearson (PSON), Next (NXT) and Bovis Homes (BVS). There have been lots more over the past few months, of course, which provide relevant case studies for investors interested in avoiding vulnerable companies. But, as pen hit paper, BT Group (BT.A) topped them all with a corker of a warning, which perhaps should not have surprised the City at all. Back in October, BT told shareholders about problems at the Italian operation. The UK company talked about "inappropriate management behaviour" which would cost the company £145 million. Little was made of it at the time. Perhaps it should have generated more concern. Now, we hear that accountants and BT chiefs got it horribly wrong. Those in charge of the company now warn it will cost around £530 million, news which sent BT shares racing to their lowest since summer 2013. Add that to its problematic pension scheme and surging cost of rights to major sporting events, and one can understand why big buyers are leaving BT shares alone. Frankie & Benny's owner Restaurant Group (RTN) warned again this week. Its problems have been well-flagged for over a year and a warning at the end of 2015 that it was "more cautious than previously on the outlook for 2016", proved a big red flag for shareholders. Chiefs were right to be cautious, and further warnings wiped out well over half the company's value in less than four months. Even after the latest update, experts are wary. "Too early to buy," says Panmure Gordon analyst Mark Irvine-Fortescue ahead of full-year results in March. Predictable weakness Braemar Shipping's (BMS) core shipbroking business may be doing well, but its technical division isn't. Again, we've known about this for ages - the unit did a lot of work for the struggling oil and gas industry - so share price weakness was predictable, although a crash to levels last seen during the financial crisis looks grim. High street bellwether Next set the tone for 2017, waiting just 24 hours into the new year to warn that profits will fall, and keep falling. It's part of a cyclical slow-down in spending on clothing and footwear. The weak pound will also force Next, already under threat from rising inflation and anticipated consumer squeeze, to raise prices by 5%. Pearson lacks diversification now that it's offloaded the FT and a stake in The Economist, which is an issue if you don't understand your core market. Net revenue at its North American higher education courseware business plunged by 30% in the fourth quarter, an "unprecedented" decline, said Pearson. Clearly, it didn't predict a switch in behaviour to renting textbooks, or a drop in enrolment as Americans shunned higher education to take jobs in an improving economy. Overstocking was costly. Is selling Penguin books really the way to go? Some profit warnings are pretty obvious to predict - there are serial offenders. But many are not Elsewhere, serial warner Mitie (MTO) is at it again, rising costs and fewer supermarket multi-buy promotions whacked recent bid target Premier Foods (PFD), while unfavourable bets dumped jilted bride William Hill (WMH). Essentra (ESNT) has also just issued a third warning in under a year. Owners of shares in the cigarette filters maker will groan when reminded of comments made last summer that "the company remains fundamentally strong". The shares are down over a third since. Don't worry, I haven't forgotten Bovis Homes, Cobham (COB), Foxtons (FOXT) and smaller players like Spaceandpeople (SAL) and Flowtech Fluidpower (FLO). There will be more, and talks with market makers confirm that prices tend to get market down by around 20% on a profit warning. Then they'll "see where the buyers come in." But how can investors spot a warning before it happens? Some profit warnings are pretty obvious to predict - there are serial offenders - or at least fear. But many are not. Accountants EY point says watch out for big macroeconomic shifts, like Brexit, or a spiral of falling profit and capital. Fixing problem contracts is a major issue, too, with significant risk for management teams unable to do so. Red Flags Companies don't like telling shareholders, let alone the wider public, that things are going badly. Call it pride, but it can be greed, too. Highly-paid directors with huge egos do not have failure in their DNA. And mismanagement doesn't just ruin reputations, it hits directors in the pocket, too, with fancy bonus packages invariably linked to share price performance. Admitting your business is in trouble has repercussions. Suppliers might decide to demand cash up front, putting pressure on cash flows, and if customers get a whiff that something's up, your bargaining power is compromised. But when a listed company expects profits to miss City forecasts, directors are bound by stock exchange rules to issue a profits warning. Sometimes they don't, like Marconi during the dotcom boom, which is when shareholders have a real problem. Director selling after any update should definitely set alarm bells ringing. That's why a quality management team is crucial to protecting your capital. You can check out the directors on the company website, often with a lovely photograph attached. They'll tell you a lot about the individuals, and where they've come from and their track record. You can quickly spot a weak team. It's important the company is generating plenty of cash. If it isn't and it breaches strict covenants, the banks will eventually take over Most company websites also have videos, and you can attend the annual general meeting, too. Make sure you turn up with plenty of questions for top brass. If you're happy with who's running the business, find out if the company has a track record of disappointing the market. And, what's the competition like? We highlighted the supermarket sector a few years ago, suggesting "trouble could be lurking." It was. And that's one of the big giveaways. Look either at the peer group, or other companies that are exposed to similar earnings drivers. If one has warned that profits are struggling, it's likely others are in the same boat. That's why it's important to check out any change in the rhetoric. Changes in management can also be a giveaway. Sure, it could be for a number of reasons, but a sudden departure is rarely good news. Watch out if it's the chief executive. The new man won't want to take the blame for the previous guy's mistakes, so there's a tendency here to "kitchen sink it." That means getting all the bad news that's been brewing out of the way in one big warning. They all do it. Of course, while the numbers might not tell the whole story, there are things to look for. Is the company growing sales? If they are, at least it means people like the product. If margins are decent, it will make good money, too. And don't forget to see if the company is stretching itself by over-borrowing. Check that the net debt figure doesn't make you wince - net gearing near 100% or higher can be a bad sign. Interest payments can quickly get out of hand, especially when interest rates rise and bank facilities come up for renewal. That's why it's important that the company is generating plenty of cash. If it isn't and it breaches strict covenants, the banks will eventually take over. What are the chances? Research shows that about three-quarters of companies that announce a profits warning will issue a second. Another, often more severe, slump in the share price is inevitable after an initial indication to the market that all is not well. There can be more, of course, and fixing a business can take years. There's also significant execution risk, and some companies are just beyond saving. An old saying in the City has it that the "first cut is the cheapest". All too often it is. Here's a tip from Warren Buffett: "If you get in a lousy business, get out of it".
17/1/2017
22:30
master rsi: 25 momentum stocks for 2017 - By Lee Wild | Tue, 17th January 2017 - 12:43 25 momentum stocks for 2017 stock screen average prices small-cap growth Designing a stock screening tool is rarely straightforward, and most require regular tweaks. It is a lack of fine-tuning that broker N+1 Singer admits is partly to blame for the underperformance of its momentum style screen, launched last summer. But changes have now been made, and not one of the 25 stocks in the original basket of shares has made it into the new portfolio. Set up in July last year, the momentum portfolio underperformed the main small-cap and micro-cap indices by 2.5 percentage points and 9 percentage points respectively, on a weighted basis. On an unweighted basis, the average price fell 0.9%, when small-cap and micro-cap indices jumped by 12% and 18%. "Possible reasons for this could include that the holding period coincided with a general increase in momentum in the market, coupled with perhaps a longer-than-ideal period before refreshing the screen," says Singer. The new screen widens the lower end of the market cap range from £24 million to £21 million. Now, the broker has picked another 25 stocks displaying most technical momentum from a screen of just over 500, excluding mining, oil, property and investment companies. Momentum is defined by the amounts by which the 20-day average share price exceeds the 50-day average price, and the 50-day average exceeds the 100-day average. Among the changes made this time round, Singer has increased the percentages by which the shorter day average exceeds the higher average from 3.5% to 7.5%. The old threshold would have selected about 75 stocks, implying much more technical momentum in the small-cap area than five months ago. Singer has also widened the market capitalisation range at the lower end from £24 million to £21 million, to enlarge the pot of stocks to pick from. The upper end is £390 million. "Unsurprisingly, there are no stocks carried over from the previous screen," says Singer, which has chosen to focus on 10 of the 25 stocks thrown up by the screen and listed below. Company Ticker Mkt Cap as at 10 Jan 2017 (£m) Price at 10 Jan 2017 (p) IQE ...... IQE 275 41 Focusrite TUNE 128 221 Frontier Devel. FDEV 105 309 Games Workshop GAW 245 764 Anglo Eastern Plant. AEP 282 711 Ergomed ERGO 66 162 Surgical Innovat. SUN 21 4 Lamprell LAM 338 99 CPP Group CPP 139 16 Brammer BRAM 213 165 Blue Prism PRSM 317 510 D4t4 Solutions D4T4 63 170 NetDimensions NETD 39 77 On The Beach Group OTB 345 265 ULS Technology ULS 59 90 Future FUTR 73 13 Revolution Bars RBG 112 225 Veltyco VLTY 21 32 Dolphin Capital Investors DCI 84 9 Northacre NTA 41 98 Northbridge Industrial Services NBI 37 144 record REC 79 36 Speedy Hire SDY 272 52 Gear4music G4M 110 546 Gfinity GFIN 26 16 For the record, here are Singer's comments on the 10 "focus" stocks. Ergomed "We believe the co-development business could drive significant upside potential as [drug developer] Ergomed (ERGO) co-invests a proportion of revenue in return for equity or royalty payments," says Singer analyst Sheena Berry. "Positive clinical data provides upside potential to our 293p target price." Future "Future (FUTR) is setting the tone for how a strong and dynamic consumer publisher should operate and can achieve. We expect further significant progress," writes Johnathan Barrett of the magazine publisher. Gear4music After such a strong rally, the shares in the largest online retailer of musical instruments and equipment in the UK may be discounting a lot of good news to come," admits Singer of Gear4music (G4M). "Whilst there was value in the stock last year, a 450% rally in the last six months and trading on 27 times calendar year 2017 enterprise value/earnings before interest, tax, depreciation and amortisation (EV/EBITDA), means a lot is now in the price," writes the broker. Gfinity "With momentum in the wider eSports industry continuing to grow and the company releasing a steady stream of positive newsflow, the shares have benefitted in recent months as there are a limited number of ways to play this attractive theme," says Oliver Knott of Gfinity (GFIN). IQE "We expect further positive newsflow throughout 2017 and IQE (IQE) is one of our key picks for the year. 'Buy'," says Knott of the supplier of compound semiconductor wafers. NetDimensions NetDimensions (NETD) provides learning, knowledge and performance management solutions to highly regulated industries. "Strong regulatory drivers in underlying markets, an attractive solution set, a healthy (normalised) growth profile and a cash generative business model are the key attractions of the business," argues Adam Lawson. Revolution Bars "Fundamentally, the shares were oversold for something which is seemingly delivering," says analyst Sahill Shan of Revolution (RBG). "The shares now trade on a more appropriate YR1 price/earnings (PE) multiple of 13.5 times and 6.3 times EV/EBITDA." Speedy Hire "The recent uptick in Speedy's (SDY) share price is the result of its new management team successfully stabilising trading in the business," explains Greg Poulton. "Speedy still has a long way to go in terms of driving sector-leading returns. The shares are optically expensive on a PE basis and in line with the peer group on an EV/EBITDA basis." Surgical Innovations "Under new management, minimally invasive surgery specialist Surgical Innovations (SUN) has recently completed a rehabilitation exercise, restoring the group to profitability and strengthening the balance sheet," Chris Glasper tells us. "As investors' faith in the recovery has increased, the share price has begun to move. The next stage will be to capitalise on this goodwill, growing the top line organically and adding new products to the portfolio, either from the development pipeline, or via acquisition." ULS Technology "ULS (ULS) [comparison platforms provider] announced in December the acquisition of Conveyancing Alliance, which is expected to be significantly earnings accretive in the first full year of ownership," says Tintin Stormont. "Conveyancing Alliance has a strong track record of revenue and profit growth and will significantly increase ULS's share of the conveyancing market and further diversifies its conveyancing revenue sources."
10/1/2017
22:37
master rsi: Sirius Minerals in top 10 AIM share tips for 2017 By Lee Wild | Tue, 10th January 2017 - 12:29 Sirius Minerals in top 10 AIM share tips for 2017 Small-caps are back and outperforming all the main domestic indices. The junior market has risen by 20% since the 23 June, compared with a 16% rally for the FTSE 100 (UKX) and just 8% for the FTSE 250. Investors have made big profits, but analysts at WH Ireland have identified the 10 stocks they think will make big bucks in 2017. WH Ireland's selections span a variety of sectors and all have "potential to shine in share price terms over the coming twelve months". It's worth noting that the broker did the same thing last year, generating a return of 16.8% between 1 January and 30 December 2016. Star tip, Spain-focused uranium explorer Berkeley Energia (BKY), more than doubled in value. "Whilst equity markets may not be as generous in 2017, we continue to believe the smaller company universe will offer their usual helpings of excitement in the year ahead," writes WHI. Sirius Minerals Analyst Paul Smith, joint house broker at Sirius Minerals (SXX), is tipping shares in the future potash miner to triple after a difficult few months. In what was a pivotal year, Sirius completed its feasibility study, successfully undertook an ambitious first phase of funding and received its final permit. First-class contractors move their diggers into North Yorkshire this year to begin work on the potash project and Britain's largest mine. It will take five years to build, but the mine should be capable of generating £1 billion of cash profit every year. "The current share price in no way reflects the value in the company going forward - currently slightly below the placing price [20p] at which large institutions and hedge funds invested," says Smith, who points out that the current market capitalisation reflects only cash held by the company, with "little or no value placed on the project itself". "We anticipate a recovery in the share price as Sirius begins construction and the mine becomes a reality. We maintain our 'buy' recommendation and 60p price target." CareTech Analyst John Cummins likes CareTech (CTH). The social care services firm made "considerable progress" in 2016, with two big acquisitions, strengthening the management team, and growing profits. "Whilst the shares have performed well, recent sector transactions illustrate the fact that the valuation multiples currently ascribed remain undemanding," argues Cummins. "We believe that the group remains well positioned to continue its strategy in targeting double-digit growth, backed by the £300 million-plus freehold property valuation and near-3% dividend yield, positioning CareTech well for the year ahead." "Underpinned by the recent transactions in the sector, we raise our share price target to 435p, which would equate to a FY 2017e enterprise value/earnings before interest, tax, depreciation and amortisation (EV/EBITDA) multiple of 11x." Berkeley Energia Berkeley Energia makes the list again. Ongoing momentum at its Salamanca project will see construction progress further, with orders for first pieces of major equipment in. "This is the stand-out uranium project development globally, benefitting from low capital and operating costs and all of the opportunities of being located in a stable democracy in a region of high uranium demand and low domestic production," explains Smith. "2017 should be a year of positive news flow for the project, against a back-drop of improving sentiment in the uranium market, and we maintain our 'buy' recommendation and 128p price target." WYG Project manager and consultancy WYG (WYG) finished 2016 in style with strong half-year results. Despite this, the shares still trade on a 30% discount to peers. Deals in the sector continue to be done at 8-12x EV/EBITDA. WYG trades on just 6.8 for 2018. Watch for further revenue growth and higher margins, contract wins and cash generation, says analyst Nick Spoliar who thinks the shares are worth 172.5p, 26% more than the current price. Caledonia Mining Caledonia Mining (CMCL) has already had a cracking 2017. Its shares are up as much as 50% to 120p, but Smith pencils in a target price of 146p as this year "sets the scene for the high impact of the new developments from 2018 onwards". The company should complete central shaft development at its Blanket gold mine in Zimbabwe early next year, increasing gold production further. Output is tipped to increase by 205 in 2017 to 60,000 ounces and the firm should increase its cash pile, despite further heavy investment. UK Oil & Gas In 2016, UK Oil & Gas (UKOG) effectively "unlocked an entirely new UK onshore petroleum play, which is, in our opinion, the most significant development for decades for the UK onshore oil & gas sector," according to WH Ireland's Brendan Long. WHI keeps its recommendation and target price 'under review' pending a comprehensive assessment of UKOG's assets ahead of a change in analyst coverage. However, the outlook in 2017 is "catalyst rich". Long expects UKOG to advance the appraisal of its Horse Hill discovery, drill the Broadford Bridge exploration prospect, "a Horse Hill look-alike", and drill a conventional target, Holmwood, that is also prospective for fractured Kimmeridge Limestone. Jarvis Securities Jarvis Securities (JIM) remains a 'buy', and Spoliar nudges up his price target by 25p to 450p. He thinks 2017 holds a range of positive potential catalysts for the stockbroker, driven by strong trading volumes, potential client administration wins, and a possible increase in interest rates. "Given the backdrop of positive trading, we expect share price progress to continue as we move towards the full-year results on 16 February," says Spoliar. Pennant International Computer based training firm Pennant International (PEN) has had a great run already, but demand for the complex, high-specification products it supplies continues to grow. Having only partially recovered from a significant derating in 2015, Spoliar thinks a price/earnings (PE) ratio of just 11 times, a big discount to peers and 20% less than Cohort (CHRT), is unfair. "The company is ambitious to grow and while mergers and acquisitions remains a possibility, the more-than-50% expansion in facilities further enables the organic opportunity," says Spoliar, who tips the shares up to 100p from 78.5p currently. Redhall This could be a game-changing year for Redhall (RHL). Hot on the heels of strong full-year results in December, the engineer could be a big beneficiary of the Government's decision to progress with the Hinkley Point C nuclear power plant. "We rate the shares with a 'buy' recommendation and 12.5p share price target [10p currently], which has scope to move higher should the group secure major nuclear new build contracts," says Cummins. LightwaveRF Finally, WH Ireland analyst Eric Burns has a speculative 'buy' for us. LightwaveRF (LWRF), which makes a range of intelligent dimmers, radiator valves, sockets and sensors, strengthened its balance sheet with a £2 million fundraise last year. "This gives it the resource for a concerted marketing push for its extensive range of products encompassing heating, cooling, lighting, ECO and power in a fast expanding market," says Burns, who believes a strategic tie-up with larger partners could be transformational. "Whilst forecasting Lightwave has been difficult in the past and we have no estimates for the current year as yet, there is material speculative upside in the share price." Summary of stocks mentioned EPIC - Company Name ------ Market Cap - Price - Recommendation SXX Sirius Minerals PLC £780.8m 18.8p Buy CTH CareTech Holdings PLC £215.4m 336.0p Buy BKY Berkeley Energia Lim £155.5m 59.3p Buy WYG WYG PLC £94.4m 136.5p Buy CMCL Caledonia Mining Corp £59.6m 109.0p Buy UKOG UK Oil & Gas Invest £40.3m 1.6p U/R JIM Jarvis Securities PLC £38.7m 352.5p Buy PEN Pennant International £27.0m 78.5p Buy RHL Redhall Group PLC £20.3m 10.1p Buy LWRF LightwaveRF PLC £6.4m 16.5p Speculative Buy
09/1/2017
23:11
master rsi: Top 10 small-cap share tips for 2017 - By Harriet Mann | Mon, 9th January 2017 - 14:09 Just nine days into the New Year and investors already know the key theme for 2017: uncertainty. Granted, it was similar last year, but with big decisions made back then going against mainstream predictions, and the stockmarket refusing to bow to doomsayers' forecasts, it's likely to be a wild ride. Prime Minister Theresa May will trigger Article 50 within three months, followed by two years of negotiations. Crucial elections in France, Germany and possibly Italy could also threaten the future of the EU. In America, Trump's presidency becomes official next week. As new leader of the free world, will he be as protectionist as feared, or far more conciliatory in practice? Despite known unknowns, equity portfolios could still do well, as evidenced by the rally since Trump's election. "Even in tough economic circumstances, companies with good ideas, innovative technology, clever business models and strong management can generate their own luck and continue to thrive," says Raymond Greaves, head of research at finnCap. That's the basis for the small-cap broker's stock ideas for 2017. Here are finnCap's 10 for 2017. Allergy Therapeutics With a quarter of the UK suffering from hayfever at some point in their lives and 10-30% of the global population afflicted, the European allergy immunotherapy market (AIT) is worth $0.8 billion (£0.66 billion). In the US it is worth more than double that, at $1.7 billion. Look at the potential addressable market and its value surges to around $9 billion. This backdrop is perfect for pharmaceuticals business Allergy Therapeutics (AGY). The allergy vaccination group's profitable European operation is busy gobbling up market share as it gathers financial momentum. Revenue is expected to grow 23% in 2017 thanks to foreign exchange tailwinds, and gross margin should climb 260 basis points to 73.6% as volumes grow on a fixed cost base. Before crucial research and development costs and general operational spend, profit should jump by a third to £19 million, finnCap analysts reckon. Outside the flagship European business, Allergy also houses a US division that is trialling the Pollinex Quattro treatment. While the group continues these studies finnCap thinks it will remain loss-making. Trading at a chunky 45% discount to its peers, with a profitable business and healthy pipeline, the valuation looks unjustified. finnCap believes the shares are worth nearly double at 40p, which would give them a market value of £235 million. Capital Drilling Using the downturn wisely by increasing capacity in its rig fleet, Capital Drilling (CAPD) is well prepared for the next phase of its cyclical story. Despite low activity levels, it's managed to stay profitable and has used its cash pot to pay out above-average dividends. Further contract wins should drop straight to the bottom line. Largely exposed to African gold mining contracts, the swing in sentiment towards the yellow metal underpinned the group's share price turnaround, further supported by the bounce in other minerals like copper and iron ore. Not only are 80% of its revenues multi-year contracts - so there is turnover visibility - but nearly half its customers are cash generative mining giants with strong balance sheets. Capital shares surged by nearly 200% last year from their low of 20p in January 2016, but are still changing hands for less-than half their previous peak. Luckily for Capital, geopolitical risk is unlikely to ease in 2017, so gold should benefit from its safe-haven status, although a rise in US interest rates could weaken the price somewhat. An 85p target price gives the shares 42% potential upside from their 60p share price. Fulcrum It's been six months since finnCap initiated coverage on utility company Fulcrum (FCRM), and the analysts have already upgraded forecasts twice thanks to meaty margins. Management has both eyes on costs, so this momentum should continue, but there's also scope for revenue growth following entry into the electrical connections market. The group is the only independent national provider of gas and electricity connections services in an £800 million market typically characterised by poor service levels. Its focus on quality of service should set it apart. FinnCap reckon the shares are worth 22% more at 69p, underpinned by high return on capital, improving margins, strong cash flow and solid balance sheet. With £12.5 million net cash, the group could look at investing in its pipeline to further support its income. For now, the dividend policy has been changed to a cover of 2 times earnings, while the interim payout doubled. GB Group A high-quality, cash generative provider of ID data solutions, GB Group (GBG) is a sitting duck for bigger global industry players. Managed by an experienced team, GB can show off long-term double-digit organic revenue growth from recurring sources, further supported by careful acquisitions. There is no denying that data is the key economic resource of the 21st century, so with the global market for online ID data intelligence services expanding rapidly and as GB Group has excellent margins, high cash conversion ratios and a 1% yield, finnCap is certain the group will do well in 2017. There will be a leadership change in April as chief executive Richard Law retires after 14 years, but there is little concern over his successor's ability. It's not a cheap, undervalued stock by any means - at 283p GB still trades on around 30 times forward earnings. But analysts are confident in the high security and the quality of the provider's earnings, and believe the shares are worth nearly a quarter more at 350p. Gem Diamonds It's not been easy for Gem Diamonds (GEMD), but the miner has navigated weak diamond prices and operating issues at its own facilities well, remaining profitable - before exceptional costs - during the upset, maintaining its dividend. Prices have finally mustered up some energy after slumping in 2015 and trading sideways last year. Larger diamond recoveries should start coming through at Gem's Letšeng mine in Lesotho, which will hike up average prices, and its Ghaghoo mine in Botswana should be able to operate at cash even until diamond prices improve. Of course, there is always the risk the market for exceptional diamonds collapses, but finnCap doesn't see this happening any time soon. The ugly duckling of the diamond miners, Gem fell 13% in 2016 and is loitering near its one-year lows, while Firestone (FDI) surged 176%, Petra Diamonds (PDL) rallied 85%, and Gemfields (GEM) climbed 20%. With a target price of 185p, magpie finnCap reckons the shares have 69% of upside to unlock. H&T Former pawnbroker H&T (HAT) has spent a good five years consolidating in the oversupplied pawnbroking market and has now reinvented itself as a high street challenger, offering financial services to customers that want face-to-face contact. These new products have good momentum - the personal loan book grew at an annualised rate of 120% in the third quarter and now represents 17% of the total loan book. At 260p, the shares trade on an undemanding 11.5 times forward earnings, with a 10.4% return on tangible equity and 1.21 times price/tangible book value. As most of its peers with a clear growth trajectory would be worth around 50% more, finnCap reckons the shares will climb to 320p as its underlying momentum is unveiled. Hurricane Energy Oil explorer Hurricane Energy (HUR) made huge operational progress in 2016, derisking the pilot and horizontal wells and the resource at its Lincoln exploration well in the North Sea. The industry backdrop has firmed up too, with OPEC's decision to finally cut production setting the scene for a more positive period for oil prices - especially for those companies with fixed balance sheets and reset cost bases. There's more exploration upside to unlock as we venture through 2017, argues finnCap - the Halifax well resource base could increase by 250 million barrels - and the specifics of its field development plan is to be hashed out: there should be multiple share price catalysts throughout the year. After a couple of tough years, many smaller oil companies are still undervalued, but, as sentiment returns, finnCap reckons the shares could climb over 80% to 91p. Ideagen Providing highly regulated industries with software that specialises in enterprise governance, risk and compliance, Ideagen (IDEA) has a strong record of coupling organic growth with strategic acquisitions, and delivering on its forecasts. There is now another certainty in life in addition to death and taxes, says finnCap: compliance. With momentum behind the software group, earnings are expected to jump by over 20% this year, which could underpin a leap in its share price to 78p - 16% higher than current levels. Ideagen's market value has already surged from £11 million in 2012 to over £110 million, which should attract bigger investors. RM Group Unloved for a number of years, education software, services and resources company RM Group (RM.) has struggled as a result of its shift away from OEM hardware and Building Schools for the Future (BSF) government contracts stifling growth. School budget tightening also hit sentiment and the stock is now "extremely cheap", trading on an enterprise value/cash profit multiple of 6 times. But with data from the Department for Education showing spend per pupil actually rising 2% year-on-year, positive news from peers and the group in line for a small currency tailwind - a fifth of its earnings are generated overseas - finnCap reckons the tide will change in 2017. Valuing its three divisions, RM Resources, RM Results and RM Education, finnCap reckons the shares are worth a quarter more at 169p. Victoria Carpets Operating in a highly fragmented industry, carpet-maker Victoria (VCP) is gearing up for a highly active year of M&A. It's expected to reveal a £40 million budget for such transactions, which will go hand-in-hand with good organic growth, strong cash generation, low risk operations and a compelling valuation. Each one of its seven previous acquisitions have been earnings enhancing. Of course, Brexit risks to the economy are very real, although management could use sterling's weakness to their advantage to gain pricing power. finnCap reckons the shares could run 22% higher, giving them a price target of 440p.# PETRA DIAMONDS LTD 159.50p -0.37% GEM DIAMONDS LTD 107.75p 2.13% FIRESTONE DIAMONDS 50.25p 2.55% GB GROUP 294.00p 1.38% RM 136.75p 0.55% H&T GROUP 265.00p 1.15% GEMFIELDS 49.50p -1.00% ALLERGY THERAPEUTICS 23.75p 10.47% VICTORIA 360.00p -2.04% IDEAGEN 69.00p 2.22% CAPITAL DRILLING LTD 56.25p -3.85% FULCRUM UTILITY SERVICES LTD 62.50p 5.93% HURRICANE ENERGY 52.50p -0.47%
04/1/2017
22:15
master rsi: Why housebuilders offer 30% upside - By Harriet Mann | Wed, 4th January 2017 - 17:54 The reward for taking the plunge into risky equities sometimes looks too good to miss. Prime minister Theresa May's imminent triggering of Article 50 has clouded the horizon for housebuilders, certainly, but the sector's tasty dividend yields, strong cash generation and 25% return on capital could mean 30% upside for share prices, the number crunchers at Deutsche Bank reckon. While Britain's decision to leave the European Union came as a surprise, the real shock came from the stock market reaction. To reflect that, the analysts at Deutsche have adjusted their numbers to reveal significant untapped upside potential, with forecasts returning close to pre-Brexit levels. Pre-tax profits forecasts for 2017 have doubled, with 2018 numbers up by half and 2019 estimates up 20%. But the sector is priced at just 1.3 times net tangible asset value (NTAV), which falls to 1.2 times in 2018. This "overplays" any risk to future earnings, says analyst Glynis Johnson, especially with return on capital employed (ROCE) worth up to three times its cost of capital. Not only do the blue-chips trade with a yield over 6.5%, but their stream of free cash flow give scope for future upgrades - look to Barratt (BDEV), Persimmon (PSN) and Taylor Wimpey (TW.), says Johnson. The mid-caps are flirting with yields of 4.5%, which will provide added support to valuations. With new ministers in charge of housing and a new White Paper due on our desks any time now, the sector could be in line for a fresh bout of volatility. But investors should keep their heads and buy the dips, adds the analyst. "We believe any weakness in share prices around this time should be used as a buying opportunity with the sector likely to demonstrate steady reassurance through the year with its continuous cycle of trading updates." Admitting the sector trades "relatively homogeneously", Deutsche has just upgraded McCarthy & Stone (MCS) to 'buy', joining Barratt Development, Berkeley Group and top pick Taylor Wimpey. Losing some of its shine, Bovis is cut to 'hold' as operational hiccups start to dent confidence. Highest yielding blue-chip Taylor Wimpey looks like it has the most to gain over the next few months, with a target price of 239p, implying 56% upside. It's also the highest yielding stock on the FTSE 100, boasting 8.7%. "This meaningful, well covered yield in combination with the reassurance on future profitability and cash flow that its strong strategic land bank offers should become further appreciated in 2017 as investor nerves on the Brexit impact on the sector are proved to be overstated," says Johnson. McCarthy is next in the pecking order with its target price of 211p suggesting the shares are worth 31% more. Investors have been wary of McCarthy's cautious customer base and lumpy completion timings since its IPO, which has weighed on sentiment. But Deutsche reckons the shares are are "too cheap", especially as it continues to demonstrate its higher margin model and progress on its growth strategy. Its recent 45% slump - the sector's down only 20% - has taken the shares 10% below their IPO price, which has the Deutsche magpies upgrading the shares to 'buy'. Barratt is trading below its sector average with a P/TNAV of 1.2x for 2017, which Johnson also flags as "too cheap". Barratt's strategic land bank is on the small size and its exposure to Greater London is certainly higher risk, but the housebuilder should lead the sector with its return on capital, thanks to its shorter landbank and expertise in public sector land. Not only does the 7.3% dividend yield turn heads but investors could untap 31% of upside. The final 'buy', Berkeley, could be hit hard by changes to tax and mortgage regulation, the impact of stamp duty and Brexit negotations. But future completions in the run up to 2018 all have legally exchanged reservations, which eases most short-term concerns. Armed with a 7.1% yield and 20% return on equity potential, its 1.6 2018 P/NTAV again looks too cheap to Deutsche. It's share price could grow by nearly 27% if Johnson is correct, pencilling in a target of 3,559p. It wasn't all good news in the 'buy' portfolio, however, with Bovis Homes given the boot. The cheapest in the sector, Bovis is the value play and is on track to realise nearly 30% of upside, but Johnson can't shake nerves relating to recent profit warnings. Management has promised to increase the dividend each year, but it's not enough to convince investors to take the plunge, especially as they are already wary of the sector. The shares are downgraded to 'hold'.
29/12/2016
22:50
master rsi: 2016 in review: An unexpected tale Six share tips for value investors in 2017 - By Richard Beddard (Money Observer) | Thu, 29th December 2016 Six share tips for value investors in 2017 This is the second year I've used my Decision Engine, a share-ranking process that identifies good long-term investments, to select three growth shares and three income shares at prices that probably undervalue them. The Decision Engine process doesn't consider dividends. It focuses on the fundamental drivers of profitability and value: the strength of a company's business, its management and share price. To qualify as an income selection, a share must meet an additional criterion. Dividends paid out in the company's most recent financial year must yield an above average return on the current share price - higher than the median dividend yield for UK shares, just under 3%. Three of last year's selections, Dewhurst (DWHT), Science (SAG) and Portmeirion (PMP), are repeated this year. Goodwin (GDWN), an engineering company, manufacturing automation leader Renishaw, which saw a strong rise in its share price, and Castings (CGS) all miss out this time. Value-based growth Science Share price: 145p | Earnings yield: 8% | Dividend yield: 2.8% Last year, Science changed its name from Sagentia to reflect the fact that acquisitions have turned it into a group of four consultancies. It employs hundreds of scientists and technicians to do research and development for other companies and provide them with advice, serving an increasingly broad range of industries. Having improved its own performance a decade ago by taking a more commercial focus, Science can probably do the same for the consultancies it has acquired. Solid State Share price: 420p | Earnings yield: 8% | Dividend yield: 2.9% For a small company, Solid State's (SOLI) Steatite subsidiary makes a wide range of products. Solid State Supplies, another subsidiary, distributes even more. It's a manufacturer and distributor of electronics, specialising in rugged computers, batteries and communication systems. It makes most of the ticket machines you see ticket inspectors lugging on railway trains. Manufacturing or customising these products is a specialised business. The company requires accreditation to handle dangerous materials and sensitive information, which also narrows down the competition. Like Science, it's growing by acquisition too. Dewhurst Share price: 665p | Earnings yield: 10% | Dividend yield: 1.% Though Dewhurst depends on construction activity, it's proved resilient in tough times, and has grown fairly steadily since the current generation of the founding family took charge in the 1980s. Dewhurst principally manufactures lift components, most famously push-buttons, but it's moving with the times, assembling control panels that incorporate touchscreens, and hall lanterns required by modern systems that direct people to the next available lift. It also supplies keypads for ATMs. Value-based income Next Share price: 4,950p | Earnings yield: 9% | Dividend yield: 3.2% In common with many other fashion retailers, by its standards Next (NXT) is having a tough year. Despite new store openings, it's going to struggle to increase revenue in the year to January 2017, and profit is likely to contract by a few percentage points. That, and perhaps wider concerns about the competition, knocked the share price into value territory. Next doesn't deserve to be there. It's highly profitable with a formidable mail-order operation that it's bringing online. XP Power Share price: 1,730p | Earnings yield: 6% | Dividend yield: 3.% XP Power (XPP) makes power converters similar to the common-or-garden converters in computers that convert alternating current to direct current, but designed especially for use in industrial and medical equipment, where reliability is essential. Originally a distributor, XP Power took control of the product by designing and manufacturing its own converters about a decade ago, informed by its close relationship with equipment manufacturers. It has opened modern factories in China and latterly Vietnam, where costs are low . Portmeirion Share price: 800p | Earnings yield: 8% | Dividend yield: 3.8% Portmeirion is having a particularly difficult year in South Korea, its third biggest market, where it sells almost as much pottery as it does in the UK, its second biggest. Even the US, where Portmeirion is prospering and earns over a third of revenue, will not save the company from a rare contraction in profit in 2016. Portmeirion has enduring brands, though. Botanic Garden, popular in South Korea and the UK, was launched in 1972, while Spode Blue Italian celebrates its 200th anniversary this year. Strong finances and a prosperous track record imply shareholders can hold in confidence for the dividend and a subsequent return to growth.
21/12/2016
22:19
master rsi: Sirius Minerals shares at critical point - By Alistair Strang | Wed, 21st December 2016 - 09:55 Sirius Minerals shares at critical point Sirius Minerals and BMR Group Last month we managed to provide a couple of grotty outlooks against these companies, not really expecting our dose of misery to unfold. After all, both had been frantically ticking boxes for the future, but it seems the market had other ideas. Sirius Minerals (LSE:SXX) To deal with Sirius (SXX) first, our prior outlook speculated on the dangers of closure below the immediate uptrend. Essentially, closure below 19.5p risked opening a shaft with an initial target at 12.7p and secondary, if broken, at a bouncy bottom of 8p. Painfully, the share price indeed has taken steps with thus far, weakness reaching 17.25p. It's now been a month and our grotty prediction of 12.7p making a guest appearance hasn't happened. The situation now feels like anything below 17.25p should provoke 15.25p and, hopefully, a bounce if the share is exhibiting symptoms of inherent strength. A movement such as this would not endanger the uptrend since 2015 as, at time of writing, it's at roughly 13.889p. However, with a break of the red line on the chart, it becomes highly probable the share price intends to explore the chasm with 8p at the bottom. On the bright side, we've given the price a month and it has made no real effort to get to our prior 12.7p. If strength is indeed lurking just below the surface, what's needed to inject of dose of optimism? On Tuesday, the share was "trading" around the 18.5p mark and need only better 19.5p to suggest a change in direction. A triggering movement like this should prove capable of bringing up a cycle toward 20.5p, maybe even 22.75p. Achieving such a level would be especially interesting as, if bettered, further oomph toward 26p and a future challenge of the blue downtrend can be expected. Only with closure above 'blue' will we be impressed as it shall require another stir of the tea leaves to figure out the next phase of its future. BMR GROUP (LSE:BMR) Similar to SXX, we'd previously an outpouring of potential misery against this as BMR Group's (BMR) price needed only break 6.1p to indulge a slippery slope down to 4.35p. Again, similar to SXX, it failed to reach the drop target, the share price bouncing from 4.625p rather than our proposed 4.35p. Our hope, again, is this signifies some inherent strength and thus we're looking for trigger points in the days/weeks ahead. The most obvious trend is shown in the blue line on the chart and it's currently at 6.612p. This line dates back to 2011 when the share price was trading at an 'adjusted' 83p. Despite recent movements not entirely indicating the market is reacting to this trend, when we view the Big Picture chart below, it's really looking possible BMR faces a change in movement strength if the price would only close above 'blue' - currently 6.612p. Initially we'd be looking for growth to an initial 7.875p with secondary 8.875p. But the secondary brings a whole new range of potentials, given it describes an official Higher High. The price of BMR shares would find itself in a region where positive news could easily drive 12.25p and beyond. For now, we're not going to dwell on dangers other than to mention 'red' on the chart
21/11/2016
15:55
master rsi: SXX 21.125p = Very level today on the share price but slowly the buys are taking over the order book, still plenty of shares for sell on the offer side, so I do not expect to change YET. Now there was a post on III giving a good detail of the stock from "1328745" ...... I'd just like to make it clear that I'm not an employee of Sirius Minerals as some have assumed. I'd also like to answer your question in relation to why I believe that the current share price doesn't reflect the 'shovel ready project' value. The share price immediately before the launch of stage 1 financing (37p) in some part factored in the expectation of successful financing. The 20p placing price of course doesn't include any element of 'shovel readiness' as the institutional investors aren't funding a shovel ready project. They're funding a great idea with mineral rights, planning consents, project plans etc. Without that funding it's not going to be shovel ready. Of course the share price was going to converge with the placing price as private investors sold shares to take up their open offer allocations. Institutional investors aren't going to be picking any shares up in the low 20's though until those two resolutions are passed and the project is genuinely shovel ready. Now it isn't. If those resolutions aren't voted through then they get their placing money back – no additional risk due to the uncertainty of private investor behaviour. Buying shares on the open market now at a similar price to the placement price is a risk too far until that vote goes through (even though the placing was oversubscribed at 20p). Once it does, the re-rate starts. In theory, based on the 37p share price immediately before stage 1 financing launch and the 20p placing price, the share price should be 29.5p when the new shares start trading. This was detailed in the circular. That's still very much on the low side though as the 37p only partly reflected the shovel ready value so I'd expect it to climb quite quickly beyond that. Remember that figures of 15p – 20p/share have been forecast for a long time for the equity raise. The link below shows the figures from Sirius Mineral's DFS and Liberum's own figures – albeit before the capital funding reduction was announced. The model's most optimistic setting allowed for 30p/share but the default was 15p. Shore Capital's research note on the 27th May used 20p/share. hxxp://liberum.com/models/sxxj79vi8n502m And no, I don't work for Liberum either!
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