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…
Dekel Agri-Vison (LON:DKL) – Ready to harvest a higher price?
Wow, did you see the dealing volumes over the last few days, several times the 315,000 daily average figure? Over 1.3m yesterday.
Yesterday’s interim results statement goes some way to underline the reasons for such investor interest in the little palm oil and cashew plantation group.
Revenues for the six months to end-June were up 5.5% to €15.4m, with EBITDA some 36% better at €1.9m, and the company recording a net profit after tax of €0.4m against a minus €0.1m previously.
Generally, the first half is the strongest which is why brokers Arden are estimating a full year €1.9m loss adjusted pre-tax.
But next year they estimate that the pre-tax adjusted loss will be down to just €0.7m – however, by then it will be showing an adjusted operating profit of €0.5m, which is very positive indeed for the group, as it is still in a very early stage of its growth.
Arden have put out a 7.6p per share objective, which is more than twice my own aim. So much more upside to go for with the shares closing at 2.75p up 10% on yesterday’s interim news.
(Profile 23.09.20 @ 2p set a Target Price of 3.5p)
STM Group (LON:STM) – Looking attractive at the current price
I really do like the feel of this cross-border financial services company. The recent results were very encouraging.
What is more I have seen continued sizeable business in its shares, yesterday was 50% more than the daily average dealing volume.
I pay attention to such numbers, indicating the ability for dealers to handle any disposals, whilst coping with ongoing buying interest.
Do not be put off by the most recent statement from the company about the appeal that it won earlier this year, being contested and up for hearing again soon. All of the legal costs are covered by insurance so it should have absolutely minimal effect.
The shares at 37.5p, after touching 45p a couple of weeks ago, are looking attractive for investors seeking a good early gain.
(Profile 27.05.20 @ 33.7p set a Target Price of 50p)
Braemar Shipping Services (LON:BMS) – Beginning to sail away?
A couple of weeks ago I mentioned that there was some nibbling at this marine services outfit. Its shares were then around the 125p level.
Last night they closed at 161.5p as more nosey buyers took stock out of the market ahead of an interim trading update due shortly.
(Profile 05.12.19 @ 185p set a Target Price of 250p)
(Profile 20.05.20 @ 99p set a Target Price of 150p*)
Sureserve Group (LON:SUR) – Trading update due shortly?
After having eased back to 48p over the last few weeks, the shares of this compliance and energy services company have been creeping gently better again.
Now at 52.5p they are only a few pence below their recent 57p high.
My view is that they will continue to edge even higher ahead of the early October trading update referring to the September year-end.
Undoubtedly, we will have some more positive news from boss Bob Holt and that can do no harm to the share price, which I see going up through the 60p level fairly soon.
(Profile 14.01.20 @ 36p set a Target Price of 50p*)
Iofina (LON:IOF) – Record interim results will lead to higher price
Yesterday this producer of iodine from oil and gas production water issued its interim results for the six months to end-June.
They were yet another set of record figures, with revenues up 8% at $15.7m and a pre-tax profit of $1.3m.
Now that the group has sorted out its refinancing its management is able to concentrate on pushing both sales and profits going forward.
Estimates from the company’s brokers suggest $33m of sales ($29.2m) and a quadrupled pre-tax profit of $3.9m, worth 2c in earnings per share for the year to end-December 2020.
For next year some $37m revenues will kick in a 60%-plus lift in pre-tax profits to $6.3m, which would be worth an excellent 3.3c for the 2021 year.
At 14p the shares are incredibly attractive trading on just 9 times current year and only 5.5 times prospective earnings.
Brokers finnCap have a price objective of 33p on the shares.
I see my Target Price being beaten very shortly, as more good news starts to come through.
(Profile 29.07.20 @13.5p set a Target Price of 18p)
And finally… ‘On the Move’
From 295p last Friday up to 320p now, the shares of MPAC GROUP (LON:MPAC) have moved up on the back of some interesting price nibbling. Unfortunately, the dealing spread is quite wide for such a stock, which can deter some investors from taking a view on the shares. Even so I continue to rate highly this packaging solutions group and its prospects.
After having eased back to 45p late last week, I am pleased to see that N Brown Group (LON:BWNG) shares are moving ahead again, closing last night at 49.75p. That is still some way below the recent end-August peak of 66p. Are Schroders still adding to their recently doubled share stake? Now at 10% of the digital fashion retailer’s equity they could well be doing just that, ahead of the interims being announced in the next couple of weeks. Methinks they are going back up to the higher 50s and possibly above again and soon.