Small cap round up: featuring Angling Direct, Billington, Helical and more…

5 mins. to read
Small cap round up: featuring Angling Direct, Billington, Helical and more…
Master Investor Magazine

Master Investor Magazine Issue 59

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In this weekly summary, Mark Watson-Mitchell updates his readers on previous company profiles and other news of interest from the exciting world of small cap stocks…

Angling Direct (LON:ANG) – bigger chance now to hook up a useful profit

Well, I have to say that I was disappointed by the trading update from the UK’s largest fishing tackle and equipment retailer earlier in the week.

The company’s year closed at the end of January, which made the company sensibly declare that the bad weather had not helped post-Christmas sales. There were other factors too, but they do not bother me.

This little company is all about expansion and getting its retail outlet numbers up significantly, now at 35 stores, up from 24 previously. More stores, largely acquired, means more stock being required and with it more growth capital. However, at the end of the year it had a whopping £5.9m cash in its coffers.

More stores equals more sales equals greater volumes to order from suppliers equals the ability to drive down purchase prices and thereby increase margins. I predict that this is what will be happening this year and next.

In-store sales were up 41.3% to £27.9m, online sales were up 13.3% to £25.2m, boosted by its European websites.

A small 2019 loss of £0.5m or thereabouts is now expected when the company declares its finals on 13 May.

The fall-back in the share price since last Tuesday’s pre-close trading update presents an excellent buying opportunity.

The shares close the week at 59.5p.

Profile 29.10.19 @ 58p set an end-2020 Target Price of 100p.

Capital Drilling (LON:CAPD) – finals due in less than four weeks

I was starting to get concerned about the recent drifting off in the share price of this expanding drilling rigs and mining services group.

The shares fell back to 48.5p this time last week, a low that I felt was unjustified.

The subsequent nibbling away by investors during the last few days has taken them back up to end the week at around 57p.

The 2019 finals are due to be announced on 19 March, so hopefully, they will be firming up even more between now and then.

I remain very bullish about this company and its prospects, as well as my share price forecasts.

Profile 23.07.19 @ 48p set an end-2020 Target Price of 76p.

Profile 22.10.19 @ 61p set an end-2020 Target Price of 100p.

Helical (LON:HLCL) – a bullish trading update or a predator?

I have been very impressed by the way the shares of my long-term favourite property development and investment group have been performing recently.

Last week they touched an all-time high of 527p. On Monday of this week they eased back to 511p before picking up again and going on to score yet another all-time high at 540p this time.

I wonder what is driving this renewed interest in the stock?

Could it be a trading update next month, or is a predator stalking?

They close the week at around 515p.

Profile 11.06.19 @ 389p set an end-2020 Target Price of 500p.

Billington Holdings (LON:BILN) – heading into all-time high territory

Master Investor Magazine

Master Investor Magazine Issue 59

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This time last week, the shares of this structural steelworks business were knocking on 450p. This was the highest that the shares had been in over 13 years – in fact they touched 505p on 28 February 2007.

That recent strength came after the notification that non-executive director John Gordon had sold down almost 70% of his holding – 200,000 shares @ 410p. Normally such a large ‘insider’ deal like that would shake the share price, but not a bit of it.

Instead they just charged higher into new territory.

A couple of weeks before last Christmas the company came out with a very bullish trading update, stating that the 2019 revenue will come out higher than the £78m expected by the market, so too with profits, where the market was going for £5.2m.

That positivity fed immediately into the share price, which has seen a subsequent near 50% price increase.

The 2019 finals are due to be published in the next couple of months, which could well create even more investment demand for this £57m valued business.

Methinks that the all-time high will be penetrated very soon – so hold very tight for the next climb upwards.

The shares end the week at around 436p.

Profile 02.04.19 @ 266p set an end-2020 Target Price of 314.5p.

Stobart Group (LON:STOB) – major investor increases stake

It is interesting to note that Toscafund Asset Management is getting more bullish about the prospects for this aviation and energy focused business.

On Tuesday it was announced that the institutional investor had taken its holding up to 20% of Stobart’s equity.

This news follows on from other knowledgeable holders adding to positions in the last few weeks, including Richard Griffiths now with 3.00% and Harwood Capital with 8.09%.

A pre-close trading statement for the year to the end of February may well be due within the next couple of weeks or so – last year it was on 13 March.

The interims announced last November were very positive – so let us hope that neither the Coronavirus nor the bad UK weather have impacted the company’s operations over the last few weeks.

The shares, which peaked at 303p in September 2017, have not been a good market of late, slipping from 120p in mid-November last to just 90p a week ago before closing the week at around that same price level.

This company’s shares have not yet been a good performer, but I still have hopes of a very much higher price prevailing this year than that right now. Hope – yes. Upside – potentially massive. When – patience.

Profile 11.06.19 @ 106p set an end-2020 Target Price of 175p.

And finally ….

Loungers (LON:LGRS) – cheers

Over the last two months the shares of this iconic restaurants and bars group have been edging ahead.

They were as low as 188p at the end of November, almost 10% below my profile price of two months earlier.

I was beginning to think that I had done my sums wrong. However, since then they have been creeping slowly ahead. They touched 272p earlier this month, before resting at around the current 262p.

They may well slip back a little, but I remain confident of this stock.

Profile 03.09.19 @ 205p set an end-2020 Target Price of 275p.

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