Small-cap round-up: featuring Helical, Braemar, Medica and more

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Small-cap round-up: featuring Helical, Braemar, Medica and more

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…

The 24.03.20 CV19 Market Recovery Portfolio + 42.6%

This portfolio of 10 stocks has shown an excellent advance over just two months. The FTSE100 Index is up 12.9% in the same time frame.

Helical (LON:HLCL) – quality always sells

The strength in the share price of my favourite office developer and investor has been very interesting.

The results for the year to end-March 2020 are due to be declared on Thursday of next week.

This commercial property investment and development company focuses on the office markets of London and Manchester. Its aim is to deliver market-leading returns by creating buildings for today’s occupiers who demand more inspiring space with distinctive architectural detail, carefully curated public realm, state-of-the-art amenities, high quality management and a flexible approach to leasing.

Its portfolio comprises some 14 properties with a value of well over £850m.

It recently agreed to sell its joint venture owned six-storey building, 90 Bartholomew Close, in the City, for £48.5m.

Gerald Kaye, Helical’s CEO, stated that “Despite operating in a constrained environment, the timing of this sale reflects my firm belief that the attraction of good quality London real estate for international capital will continue.”

And that is just what Helical is all about – good quality.

The group is modestly geared and has some cracking properties in its portfolio.

Since my end of week comment two weeks ago the shares have moved up from 286p to close this week at around 347p, just 3p short of where I thought they would move up to, there is still so much more to go for with this stock.

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

Braemar Shipping Services (LON:BMS) – big leap after last week’s profile

On Wednesday 20 May I presented a follow-up profile on this company declaring that the shares at 99p were ready for a big recovery.

Well we have had a good move forward this week in the share price of this shipping services group, up nearly 40% to 138p at one stage.

They close the week at around 125p following some understandable profit-taking after such a swift rise.

The results for the year to end-February 2020 are due to be announced within the next fortnight, when we should get an up to date picture of current trading and what could be expected over the balance of this current trading year.

The shares look capable of a swift move up to trade the 150p – 160p range very soon.

Profile 05.12.19 @ 185p set an end 2020 Target Price of 250p.

Medica Group (LON:MGP) – professionals buying into the shares

Interesting to note that Gresham House have declared a 6.17% stake in the UK market leader in the provision of teleradiology services group.

The AGM on Wednesday 20 May was one of confidence despite the impact of the virus to their business.

Plenty of cash and facilities will help this undervalued group get through the balance of this year.

Its shares now at 131p are also showing some resilience. Perhaps that is amongst many of the reasons why Gresham House has been buying the stock.

I still see them edging higher before the end-July first-half trading update.

Profile 07.01.20 @ 155p set an end-2020 Target Price of 215p.

TClarke (LON:CTO) – AGM news helped the shares recover

Wednesday 24 June is when this building service group will be holding its AGM.

The company was doing very well this year until the lockdown, then it just fell away business wise.

Its order book, however, is currently up at around £408m, with its 2020 year’s book remaining ‘robust’.

It has a strong balance sheet, cash in the bank and good facilities to hand. The group is operationally tight and its shares look undervalued at the current 101.3p.

Profile 10.12.19 @ 120p set an end 2020 Target Price of 165p.

DX (Group) (LON:DX.) – encouraging trading update yesterday shows value on offer

As an essential service provider in the next day delivery service sector, DX has continued to maintain operations at all its depots and service centres since the Government’s ‘lockdown’ measures came into effect.

Yesterday’s Trading Update clearly stated that it has experienced a slow and steady recovery in trading since mid-April and that business has been better than expected.

Furthermore, the company declared that revenue and adjusted EBITDA for the full year to 27 June 2020 will be ahead of current market forecasts.

The company’s brokers, finnCap, conclude that as economic activity picks up DX will see an immediate benefit and resume its recovery path and strategic progress. For the next year the brokers are estimating £2.8m pre-tax profit, then £6m for the prospective year to end-June 2022.

finnCap are looking for the shares, now 10.4p, to climb to 18p in due course.

Profile 20.02.2020 @ 12.5p set an end 2020 Target Price of 15p.

(* denotes that previously a Target Price has been achieved.)

On 30th July at 1pm we’ll be holding the next live Q&A webinar with the Master Investor himself, Jim Mellon. Please share a question for Jim below and we’ll try to answer as many as possible in the live webinar. Sign up for the webinar here.

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