Hunting, Winkworth, Accrol And Zinc Media
Hunting Group (LON:HTG) – Another Year Of Growth
The Trading Update issued for Wednesday’s AGM by this global engineering business was quite positive.
In the group’s first three months of the current year, it showed an EBITDA of $28.9m as compared to the $22.4m in the same period last year.
CEO Jim Johnson guided that the majority of the group’s product lines have reported a positive start to the year, leading to management retaining its full-year EBITDA guidance of $125m to $135m.
He stated that:
“2024 is likely to be a further year of growth for the industry driven by geopolitical and macro-economic factors.
Therefore, management remains confident of delivering its current EBITDA guidance, given the broad-based strength of the global oil and gas sector.”
Analysts Toby Thorrington and Andy Edmond at Equity Development now have a ‘fair value’ for the group’s shares of 436p, against the 352.50p at which they closed last night.
In my article of 19th February, I stated that I considered that the group’s shares, then 303.50p were very capable of further price climbing and suggested that they were a very Strong Hold, looking for at least 360p in due course.
After hitting 369.50p last Friday, the group’s shares closed on Wednesday at 358p, before some profit-taking clipped them back yesterday by 5.50p.
They remain a Strong Hold.
(Profile 15.03.21 @ 275p set a Target Price of 350p*)
(Profile 12.04.23 @ 240p set a Target Price of 300p*)
Winkworth (LON:WINK) – £22m Value With £5m Cash In The Bank
The London-based property sales and letting agency could see better times ahead.
On 12th April last year I stated that it may be some while before the group’s shares, now 180p, hit my Target Price – but investors should stay firm with their positions.
Since then, the shares have been down 132p, making my view look stupid.
After yesterday’s results announcement of its finals to end December last year, showing a year of almost standstill revenues at £9.3m, but a lower adjusted pre-tax profit of £2.1m (£2.5m) that saw earnings easier at 13.0p (15.2p) – however the dividend was actually increased to 11.7p (11.0p) per share.
It is that divi uplift that shows Management confidence of some recovery this year and next.
Analyst Rob Sanders at Shore Capital Markets has current year estimates out for 2024 with £10.3m revenues, £2.4m profits, 14.4p earnings and a 12.2p per share dividend.
Two years out he has pencilled in £12.1m revenues, with 2026 profits of £3.1m, 18.9p in earnings and 15.0p per share in dividends.
It may still be some time for my Target Price to be achieved, however tucking away a few of this group’s shares upon price fallbacks could well prove quite beneficial, especially as the property markets start to recover.
They closed at 172.70p last night, valuing the whole group at £22.m – well worth noting is the fact that the group has some £5m cash in the bank – which could make it attractive to players in the Private Equity market.
(Profile 19.07.21 @ 190p set a Target Price of 240p)
Accrol Group Holdings (LON:ACRL) – Another Bidder In The Wings?
Despite yesterday publishing its Scheme Document for the Navigator Paper UK bid for this group, there are market whispers that others may still be considering whether to make a bid for this tissue-based products and wet wipes maker.
Analyst Anubhav Malhotra at Liberum Capital has downgraded his Buy to Hold.
He believes that Navigator’s bid for the group is at a fair price, but he has retained the Price Objective of 38p.
Malhotra said that the shares have been trading higher as the market ‘may be anticipating a competitive bid or a revised offer’ from Navigator, which launched a £130m bid for the group last month.
The whispers suggest that with such a professional investor base in the group’s equity, the majority may take their time in accepting the bid, which many still consider to be far less than a good market value.
Since the bid was made public the group’s shares have remained firmly above the cash offer.
At the end of January this year I noted that its shares, then 34.45p each, were underpriced and could well head up through and above my recent Target Price before Spring is over.
They hit 40.90p on 4th April, achieving my aspiration.
But they closed last night at just 38.61p – could another bidder be biding his time?
(Profile 12.03.19 @ 22p set no Target Price)
(Profile 22.01.24 @ 34.60p set a Target Price of 39.75p*)
And Finally ….
Zinc Media (LON:ZIN) – A Gamble On Recovery On The Way?
As I clearly stated in late May last year –
“To date this stock has been a failure as a selection for this column.
A year ago, I profiled the company, which I still like very much, but its shares have proved to an extremely weary performer.
In fact, they have not been higher than my Profile price of 117.5p, dipping to an interim period low of 77p.”
But I was hopeful that its Management could pull things around.
Well next week I will be chatting with the award-winning television and content production group after it publishes its results for the year to end December 2023 – due on Thursday 25th April.
I am looking forward to its boss Mark Browning giving me good news to impart to those unlucky investors who may have followed my previous enthusiasm about the group’s prospects.
Last night the £18m capitalised group’s shares closed at 79.49p, while I note that analysts Harold Evans and Tom Like at Singer Capital Markets have a 163p Price Objective on the group’s shares, due possibly to their view that the group will be breaking into profitability this year as its handles a very healthy production Order Book.
Realising that it may well be some time before my previous price aim is achieved, as an outright gamble, I am now going to put out a new Target Price on the group’s shares at 100p.
(Profile 25.04.22 @ 117.50p set a Target Price of 148p)
(Profile 18.04.24 @ 79.50p set a Target Price of 100p)
(Asterisks * denote that Target Prices have been achieved since Profile publication)
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