In a special mid-week edition, Mark Watson-Mitchell rounds up the movers and shakers in his universe of exciting small-cap companies.
Corero Network Security (LON:CNS) – building up its regular repeat income
58% growth in first-half orders has seen this £40m valued cyber security company secure more annualised recurring revenues – which I just love to see and which is why I was confident enough to profile this little group in mid-April.
The trading update for the first half to end-June shows that the group made a solid start to the current year, despite Covid-19.
CEO Lionel Chmilewsky, when telling shareholders that it had won 18 new customers in the first half, stated that “we believe there continues to be a significant growth opportunity for Corero, underpinned by our differentiating technology and strong market dynamics.”
The shares of this loss-making company at 7.88p, after hitting 9p last week, are now well above my price objective and probably not for chasing until more is visible, best to wait until the interims are published.
Profile 14.04.20 @ 4.2p set an end-2020 Target Price of 6.5p*.
Luceco (LON:LUCE) – brokers are very keen on this one
Well, they hit my price objective in less than a month.
On Tuesday of this week the shares of this innovative wiring, lighting and power products group hit 124.86p – my aim was for 125p.
Last night they closed at 125.4p.
However, I have absolutely no worries that my aim will be beaten within weeks and then some.
The first-half trading update was very positive and my confidence is bolstered considerably.
Despite the massive Covid-19 impact generally, this company expects to equal, if not beat, its 2019 performance. Certainly, it will beat previous market expectations.
It was pleasing to see that two brokers have upped their sights on the stock. Peel Hunt rate the shares as a ‘buy’, increasing their price from 103p to 135p.
Liberum Capital are very much keener, also rating the shares as a ‘buy’, increasing their price from 170p to 200p.
Profile 15.06.20 @ 96.1p set a Target Price of 125p*.
Halfords (LON:HFD) – becoming a good dealing counter?
Plans to close 60 of its stores this year are an essential part of this group’s ‘right-sizing’ strategy.
What has shone through the lockdown was the real potential of its online offer, the strength of its cycles and garage services, while a realisation that it should be reducing its sales of power tools and camping equipment.
After I profiled the company a couple of weeks ago my target price was hit within days, giving those fleet of foot a useful 18% gain in days.
Then the figures were announced on Tuesday of last week and the market sliced the shares back down to 130p.
Then at 134p last Thursday I suggested that they were ideal for an averaging.
Last night the shares closed at 152.70p, heading quickly up towards my first profile price. This really does look like a cracking ‘dealing counter’.
Profile 02.07.20 @ 156.5p set a Target Price of 180p*.
Braemar Shipping Services (LON:BMS) – Unicorn building up its stake
I was pleased to note that Unicorn Asset Management has been building up its stake in my favourite shipping sector group.
Yesterday it was declared that it had crossed the 5% line on Thursday of last week and now holds some 1.6m shares, 5.11%.
Just a month ago the company announced its finals to 29 February 2020, at which time Ronald Series the Chairman informed shareholders that, “The year has started well and current trading is resilient, despite the ongoing impact of COVID-19, and therefore we look forward to the year ahead with cautious optimism.”
Methinks that Unicorn will be adding to their holding in this undervalued business.
Its shares closed last night 121p. My recent profile on the company is almost half of its way to my short-term objective.
Profile 20.05.20 @ 99p set a Target Price of 150p.
DX (Group) (LON:DX.) – the new management plan is obviously working
Yesterday’s trading update from this next day delivery service showed that its net cash position, net £12.3m at the end of June, was better than the market was expecting.
Better trading volumes from both existing and new customers were encouraging.
The full year to end-June figures will be published in late September.
Brokers finnCap are going for a £0.9m loss, before estimating a £2.8m pre-tax profit for the current year and then up to £6m for the end-June 2022 period.
The group’s shares have been a rising market of late, backed by Liberum Capital forecasting 30p a share as their objective.
Now at 16.5p after yesterday’s statement it does look as though they are heading a lot higher yet.
Profile 20.02.20 @ 12.5p set a Target Price of 15p*.
Premier Foods (LON:PFD) – a more than ambient price performance
Have you noticed the way that the shares of one of the UK’s biggest food groups have been creeping higher over the last couple of weeks?
The year to 28 March 2020 saw Premier’s group revenue up 2.8% at £847.1m, while adjusted pre-tax profits were 6% better at £93.3m.
After its new innovation strategy was implemented it recorded 11 consecutive quarters of UK revenue growth.
Further progress is anticipated this current year and we should be getting a clear Trading Update in less than a month’s time when the group holds its AGM on Wednesday 12 August.
Perhaps that is one of the reasons why the shares have risen so well over the last two weeks from 67.5p to last night’s 87p.
A near 29% rise in just two weeks, with more to come, I am sure.
Profile 29.06.20 @ 67.5p set a Target Price of 101p.
(*Denotes that target prices have been previously achieved.)
Results news due next week
21.07 Audioboom (LON:BOOM) – Interims/AGM
21.07 Begbies Traynor (LON:BEG) – Finals
21.07 Bloomsbury (LON:BMY) – AGM
21.07 TClarke (LON:CTO) – Interims
22.07 Wincanton (LON:WIN) – AGM
23.07 Circassia Group (LON:CIR) – AGM
23.07 Cohort (LON:CHRT) – Finals
23.07 GetBusy (LON:GETB) – Interims
23.07 Helical (LON:HLCL) – AGM
23.07 Petards (LON:PEG) – AGM
24.07 Surface Transforms (LON:SCE) – AGM