Hot Features
Premium
Register for real-time alerts, custom portfolio, and market movers
There are many things that I like about this company. But there are two large negatives that make me hesitate.
What it does
When you are on an airplane and the stewardess serves you a drink the hand-held computer thingee that takes your credit card payment, or simply registers the sale, could have been supplied by Belgravium (LSE:BVM).
Similarly, train operators use Belgravium’s hardware and software to record sales, take orders and keep track of trolley and buffet car sales.
Mobile computer-things are attached to fork lift trucks going around warehouses to tell them what to move, and for the company to know what they have and where it is located. Fuel-lorries making deliveries use in-cab computers supplied by Belgravium.
These are some of the services provided by Belgravium – it’s quite a long list, but all hardware and software-related; usually it is for remote information gathering, reconciliation and management, such as keep track of lorries or employees.
Earnings history
What attracts me to Belgravium is firstly its low share price relative to the average earnings per share over the last 10 years.
At a share price of 4p it has a market capitalisation of £4m. Average earnings per share have been 0.67p.
Therefore the cyclically adjusted price earnings, CAPE, ratio is 6, less than half the average UK share.
Piotroski score
Taking annual reports, I find a Piotroski score of eight out of nine. While the share price has halved over the last three years indicating that the market expects trouble ahead we find that the company is:
1.Profitable
2.Had a positive cash flow
3.Return on assets improved in 2014 compared with 2013
4.Cash flow greater than profit
5.No long term debt thus the financial gearing ratio has not declined
6.The current asset ratio has deteriorated – this is the one Piotroski failure
7.It did not raise equity capital in 2014
8.Gross profit margin improved in 2014 compared with 2013
9.The asset turnover ratio improved year on year.
But when we look at the latest half year report……… To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
