Small cap round up featuring: MPAC, Ramsdens, Avon Rubber and more

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Small cap round up featuring: MPAC, Ramsdens, Avon Rubber and more
Master Investor Magazine

Master Investor Magazine Issue 58

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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…

MPAC Group (LON:MPAC) – what a little cracker, second profit upgrade

Well, I have to say that I am very pleased with the full-year trading update for the December year end – it was excellent and exploded the shares.

The high-speed packaging and automation solutions group reported its second profits upgrade in just a few months.

Not only did it declare that it had enjoyed a continuation of the strong trading in the final quarter, but it also stated that there was an improved outlook for the current 2020 year.

With a strong order book for execution in 2020 chief executive Tony Steels commented that,

“I am confident that we will be able to report an excellent financial performance for 2019 and improved outlook for 2020 which gives us confidence for the future progress of the business.”

I love it and so do the analysts and investors who reacted by buying the shares up from 205p last Monday morning to a peak of 275p on Thursday and closing the week at around the 262p level.

And still the shares look cheap to me – even though they have well and truly beaten my end-year target of 235p, which was set less than a month ago.

The finals are due in early March.

Profile 19.12.19 @ 182p set an end 2020 Target Price of 235p.

Ramsdens Holdings (LON:RFX) – strong trading ahead of expectations

As a result of strong trading across the business the board now expects the full year pre-tax profits to be comfortably ahead of market expectations.

Well, is that positive enough for you?

The diversified financial services provider and retailer enjoyed a great Christmas trading period.

This company is a fast-growing operator in four core business sectors – foreign currency exchange, pawnbroking loans, precious metals buying and selling, and the retailing of second hand and new jewellery.

It would normally announce its annual results in June – however that could well be brought forward – remember ‘good news always travels faster’.

As the shares close the week trading at 247p, after breaking my 2020 target price at 251p last Wednesday, I fancy them for a slip back and then another upwards run, perhaps to 280p or thereabouts.

The finals trading update is normally due in early April, leaving some ‘stock playing time’.

Profile 07.11.19 @ 204p set an end 2020 Target Price of 250p.

Carr’s Group (LON:CARR) – strong balance sheet and higher earnings due

The agriculture and engineering group issued a trading update at last Tuesday’s AGM.

It declared that the agricultural products side was a little slower due to mild weather conditions and that any shortfall will be made up by a stronger performance on the engineering side.

That knocked the shares from 157p to 146p at one stage before recovering to 152.5p by the end of the week.

This was not a shock, in any way, to those that follow the company.

What it does do is offer investors, with eyes wide open, the opportunity to buy into the shares at the lower levels.

The company has an excellent balance sheet and is a well-established dividend payer, with growing earnings expected.

Profile 11.07.19 @ 153p set an end 2020 Target Price of 200p.

Joules Group (LON:JOUL) – disappointing results due

Oh, what a bad way to start the year for this iconic multi-channel clothing retailer.

Friday’s announcement that the Christmas period was well behind hopes helped the shares drop to 150p in response, but that was before some cheap buying took them higher to end the week around 176p, but off over 55p on the week.

Master Investor Magazine

Master Investor Magazine Issue 58

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I still like this company, its products and its style but it does seem that its management has to get more on top of things and react faster to retailing mishaps.

The interims are due out on Tuesday 21 – so I will wait until then to amend my target price.

Profile 19.03.19 @ 282p set an end 2020 Target Price of 387p.

Polar Capital (LON:POLR) – expanding assets under management

Despite challenging conditions out there in the fund management sector, Polar has put in a good performance over the last nine months.

During that period from 31st March 2019 to end December 2019, assets under management (AuM) actually increased by £400m from £13.8bn to £14.2bn.

Hopefully showing a trend, it was interesting to note that the group’s UK Value Fund had net inflows of £100m in December alone – probably reflecting the election result and the reduced Brexit uncertainty.

The group’s shares, now trading at around the 566p level, have yet to really perform as I had anticipated, but there is still time for my optimistic target to be approached.

Profile 10.09.19 @ 530p set an end 2020 Target Price of 675p.

Avon Rubber (LON:AVON) – going off like a bullet?

I have been keen to see just how strong the shares of this advanced technology products group have been of late.

A useful kicker was the completion of the group’s purchase of 3M’s ballistics protection products business, once it was cleared by the US authorities.

The shares peaked at 2,542p on Wednesday, before closing the week at around the 2,420p level, still up 335p on the week.

They have well and truly achieved both of my end-2020 price targets.

With this current strength, the shares do not look ready for selling just yet, despite the healthy short-term profit.

Profile 03.10.19 @ 1,700p set an early TP at 2,000p and an end-2020 Target Price of 2,250p.

Braemar Shipping Services (LON:BMS) – much cheaper than Clarkson

At one stage last week, this shipping services group saw its shares dip away to a low of 200p before closing the week strongly at 224p.

The group should be reporting its trading update for its end-February 2020 finals in the next two months.

I am looking for around 22p of earnings in the current year.

At 224p that rates the shares significantly lower in rating terms than its peer Clarkson – which is a lot more expensive.

These shares have a lot further to climb and I have no worries about my target price of 250p being achieved well before the end of the year. It could happen in the next two months.

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

Epwin Group (LON:EPWN) – Steady as she goes

Before the end of this month, this building products maker and supplier will be announcing its trading update for the 2019 December year end.

At the halfway stage the company stated that trading was in line with expectations, and that it was positive about its medium-term prospects.

The shares close the week at 103.5p after touching 105p on Monday, beating my target price.

There is more to come yet.

Profile 22.08.19 @ 73.5p set an end 2020 Target Price of 100p. 

And finally ….

Capital Drilling (LON:CAPD) – expect a trading update next week

I am sure that I do not have to repeat that I do like the potential for this drilling rig and now mining services group.

A number of new contracts in the second half-year give good potential for the current year’s results, especially as it expands still further its various services on offer now to its growing list of clients.

The shares have been up to 75p recently before collapsing to 51p just before Christmas. They close the week at 63.5p and I guess they will rise again next week on the back of a bullish trading update.

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.

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