Ocean Wilsons Holdings (LON:OCN) – At An Almost 50% Discount To Value
I am of the opinion that the shares of this Bermuda investment holding company are beginning to look very cheap at around the 1,290p level.
The LSE and Bermuda SE-quoted company which, through its subsidiaries, holds a diverse portfolio of international investments and operates a maritime services company and provides logistics services in Brazil.
In fact, the company owns 57% of Wilson Sons, which is one of the largest providers of maritime services in Brazil with activities including towage, container terminals, offshore oil and gas support services, small vessel construction, logistics and ship agency.
The group’s recently reported results for the year to end December 2023 highlighted a robust performance from the Brazilian subsidiary Wilson Sons, as well as growth from the investment portfolio.
While Edison’s forecasts are under review the research group valued OCN at 2,564p a share, suggesting that its shares are currently trading at a very significant 48% discount.
Given the strong trading and optimistic outlook, risks appear to be to the upside, states the researcher.
“The investment portfolio generated a gross return of 10.1% and net return of 8.9%, against OCN’s performance benchmark of 6.4%. The portfolio benefitted from strong growth in some of the largest technology companies that are held within various funds.
Overall, the portfolio was broadened by adding value-oriented funds and increasing the weight of defensive assets, neutrally positioning the portfolio.”
Edison Investment Research notes that the group’s ‘strategic review’ is ongoing, however it is expected to be completed within the next few months.
Yesterday the £446m capitalised group’s shares, which went ex a 67p a share dividend two weeks ago, dipped to 1,260p before closing at 1,290p.
On Friday 10th May the shares hit 1,500p, just 100p off my recently set TP – which is a level that I am confident will be broken within the next year or so.
(Profile 26.02.24 @ 1,335p set a Target Price of 1,600p)
AG Barr (LON:BAG) – Getting A Great Deal Fizzier
This Friday could see the IRN-BRU and soft drinks maker update its shareholders on just how well its first half year is progressing.
Being held in Glasgow the AGM, for last year’s excellent results, might well report a continuation of the recent good news.
Estimates for the current year see £57.0m (£50.5m) profits and 38.1p (33.6p) in earnings, sufficient to cover a 17.1p (15.1p) dividend per share.
In late March when reporting the latest results, the now-retired CEO Roger White stated that:
“With our business in a strong financial position, and our portfolio of differentiated brands poised for further growth, I have every confidence that our proven strategy, our results-driven teams and our well-invested asset base will continue to support long-term growth and value creation.”
It is now up to Euan Sutherland, the new boss, to tell us exactly how the £690m capitalized group is faring and how its near-term outlook is progressing for its shareholder’s benefit.
The shares closed almost 5% better last night, at 624p.
(Profile 31.07.20 @ 444.5p set a Target Price of 525p*)
Capital Limited (LON:CAPD) – Mining For Better Valuation
This is another company that is holding its AGM shortly, in the City on Wednesday 5th June.
The group is a leading mining services operation providing a complete range of drilling, mining, maintenance and geochemical laboratory solutions to customers within the global minerals industry.
Its services include exploration, delineation and production drilling; load and haul services; maintenance; and geochemical analysis.
Although the group’s corporate headquarters are in the UK, it has established operations in Côte d’Ivoire, Canada, Democratic Republic of Congo, Egypt, Gabon, Ghana, Guinea, Kenya, Mali, Mauritania, Nigeria, Pakistan, Saudi Arabia, Tanzania and the USA.
Analysts David Butler and Charlie Bendon at Tamesis Partners have a 160p Price Objective out on the group’s shares, noting that:
“We remain positive on the outlook for a strong operational performance through 2024.
Key growth projects in the Capital business are ramping well, projects continue to be won with high quality clients and rigs are being mobilised to higher quality contracts.
MSALABS is developing momentum, both at their NGM labs contract and their partnership with Barrick.
The mining services business has the potential for another big contract.”
The group’s shares have at long last topped the 100p level, closing at 102.88p, and looking very capable of moving significantly higher.
(Profile 23.07.19 @ 48p set a Target Price of 76p*)
(Profile 22.10.19 @ 61p set a Target Price of 100p*)
(Profile 03.08.20 @ 77.5p set a Target Price of 100p*)
Cohort (LON:CHRT) – Defensibly Strong And Under Priced
In late March I noted that this defence technology and related products group had received quite a few new orders for its various subsidiaries.
Analysts Mike Jeremy and Andy Edmond at Equity Development have estimates for the year to end April 2024 for £188.1m (£182.7m) sales, lifting adjusted pre-tax profits to £18.7m (£17.7m), with earnings of 36.2p (36.4p) and paying a dividend of 14.7p (13.4p) per share.
For the current year they estimate £199.9m sales, £21.6m profits, 40.3p earnings and 15.4p of dividend.
The analysts had a ‘Fair Value’ on the shares at 725p, which compared with the then 640p price in the market.
My view was that investors should Hold very tightly.
Last Thursday morning the group issued a Full Year Trading Update stating that its performance was slightly ahead of expectation, while confirming that it had a record closing order book for the year to end April.
Ahead of the finals being announced in late July, CEO Andrew Thomis stated that:
“Cohort’s performance was slightly ahead of our previous expectations for the year with growth in revenue and profits.
Following strong order intake, we have a record closing order book with encouraging prospects for further orders.
Our strong closing net funds position provides a robust platform from which to invest in the business and, potentially, acquisitions.
We expect to continue our organic growth in 2024/25 and beyond.”
The group’s shares responded well to the good news, closing well up last night, some 16p better at 846p.
Now a Strong Hold.
(Profile 06.08.19 @ 446p set a Target Price of 607p*)
(Asterisks * denote that Target Prices have been achieved since Profile publication)