[Event] Join Me At The ShareSoc Masterclass: 27 November, London

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10 November 2018
By Maynard Paton

I just thought I would let you know about my participation in an upcoming investor event.

The ShareSoc Masterclass will be hosted at the Clayton Hotel, Chiswick, London on Tuesday, 27 November, and will run from 5:00pm to 7:30pm.

The event is a panel session, and the panellists are:

* Leon Boros (ISA millionaire and acquisition consultant);
* Professor Glen Arnold (Investment author and  Deep Value Shares newsletter editor);
* Graham Neary (Cube.Investments founder and Stockopedia writer), and;
* Me

Glen and Graham will each spend 20 minutes presenting an insightful investing topic. The rest of the evening will be dedicated to the panel answering investment questions from the audience. I am looking forward to taking part and I am sure the occasion will be very educational and entertaining.

ShareSoc is a not-for-profit organisation that is dedicated to the support of individual investors. Event tickets are currently on sale and a discount is available until 12pm noon on 12 November.

Just click here to read full details of the event and to secure your ticket.

I hope to see you there.

Maynard Paton

[SharePad] Screening For My Next Long-Term Winner: Zytronic

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10 November 2018
By Maynard Paton

You might recall from the other week that I decided to unearth the market’s most reliable dividend payers.

My theory was simple — companies with illustrious payout records should provide much more reliable returns during market setbacks than a collection of more speculative shares.

I therefore employed SharePad to identify companies that had lifted their dividend every year for at least the last ten years… and by a compound average of 5% or more.

I also limited the search to companies that offered a forecast payout yield of 4%-plus.

My initial screening pinpointed PayPoint — although my SharePad trawling did reveal another interesting name: Zytronic.

You see, this particular small-cap also boasted an extended history of rising dividends…

…but in addition, offered a 5.7% forecast yield and net cash that represented a substantial 22% of its market cap.

Simply click here to read my Zytronic article for SharePad.

Maynard Paton

Oleeo: The 4:28pm Results Revealed A Further Earnings Slump As Anonymous Tip-Off Corrects My HMRC Mistake

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07 November 2018
By Maynard Paton

Update on Oleeo (OLEE).

Event: Preliminary results for the twelve months to 31 July 2018 published 02 November 2018.

Summary: Publishing results at 4:28pm on a Friday is never a good sign. And sure enough, the recruitment software outfit warned of yet another profit slump. Still, at least revenue inched to a new record as the firm enjoyed greater subscription income. Meanwhile, an anonymous tip-off has set me straight about OLEE’s contract with HMRC — the deal appears not to have been lost after all. All I can do now with this illiquid share is hope for an earnings rebound. I continue to hold.

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System1: H1 Results Could Mean The P/E Is Just 9… Assuming The Ad Ratings Service Eventually Becomes A Money-Spinner (I’m Not Sure)

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06 November 2018
By Maynard Paton

Update on System1 (SYS1).

Event: Interim results for the six months to 30 September 2018 published 02 November 2018.

Summary: A couple of earlier updates had already signalled this lacklustre first-half performance. Indeed, several references to competitive pricing and re-designed products implied the advertising research specialist may no longer be the ‘pioneering’ force it once was. Furthermore, the new Ad Ratings service could be hard pushed to become a real money-spinner and return the group to growth. That said, margins remain good, there is cash in the bank and the P/E might be 9… if you believe some significant development expenditure will eventually pay off. I continue to hold.

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Tristel: 2018 Profit Advances 14% (Before Hefty Share-Based Payments) As Bizarre Management Decision Delays FDA Application Once Again

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26 October 2018
By Maynard Paton

Update on Tristel (TSTL).

Event: Final results for the twelve months to 30 June 2018 published 17 October 2018 and shareholder presentation hosted 18 October 2018.

Summary: I was broadly satisfied with these full-year figures, which set new records for revenue, profit and the dividend. However, the statement and City presentation provided numerous little niggles — not least a bizarre management decision that has delayed product approval within the United States for a further six months. Still, TSTL’s collection of medical disinfectants continue to produce attractive accounts and perhaps their biocidal qualities have been underlined by recent deals with the NHS and Parker Laboratories. I continue to hold.

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[SharePad] Screening For My Next Long-Term Winner: PayPoint

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26 October 2018
By Maynard Paton

I don’t know about your shares, but my portfolio was thumped during this month’s market sell-off.

The drubbing prompted me to consider whether I should remain invested in my racy growth stocks and contrarian recovery plays — or seek out some alternative opportunities instead.

My latest SharePad trawling has therefore centred on dividends — which for many of us are the gold standard of investing dependability.

I mean, employ the right directors at the right business, and shareholders can sit back, relax and enjoy consistent payout advances…

…regardless of what happens to the stock market, the economy and just about everything else!

Simply click here to read my PayPoint article for SharePad.

Maynard Paton

Bioventix: 2018 Results Suggest 20% Underlying Growth But Disappointing Troponin Sales Leave Lofty P/E Open To Debate

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12 October 2018
By Maynard Paton

Update on Bioventix (BVXP).

Event: Preliminary results for the year to 30 June 2018 published 08 October 2018.

Summary: The antibody specialist delivered yet another set of record results, with my number-crunching indicating underlying growth of 20%.  However, I was disappointed to discover early sales of the important new troponin product had been below expectations — and may have left the lofty P/E valuation open to debate (at least for now). Still, the business continues to exhibit magnificent accounts while a special dividend for the third consecutive year underpins the board’s confidence. I continue to hold.

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[SharePad] Screening For My Next Long-Term Winner: Character

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08 October 2018
By Maynard Paton

I have written another article for SharePad.

This time my screening has short-listed Character (CCT) as a possible longer-term investment.

The attraction here is a quite extraordinary story about buybacks.

You see, since 2006, this small-cap has bought back shares every year to reduce its overall share count by a huge 60%.

What’s more, the purchases have been an exemplary use of surplus cash. The average price paid was 143p, and the shares currently trade above 500p.

Needless to say, I now ask myself whether further significant buybacks at Character should prompt us to invest, too.

Simply click here to read my Character article for SharePad.

Maynard Paton

Getech: H1 Revenue Hits A 7-Year Low And For Now My Hopes Rest On A Stronger Oil Price

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08 October 2018
By Maynard Paton

Update on Getech (GTC).

Event: Interim results for the six months to 30 June 2018 published 28 September 2018.

Summary: These figures were not as good as I had hoped. The lowest first-half sales for seven years created a not-insignificant operating loss and left cash flow dependent on tax refunds. Still, the geoscience software specialist talked of a stronger second half and I remain hopeful the accounts will eventually showcase the high margins and expanding revenue the directors continue to predict. For the time being, I just have to trust a stronger oil price can one day tempt GTC’s customers to increase their spending. I continue to hold.

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Q3 2018: 1 Top-Up And My SharePad Side-Income

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03 October 2018
By Maynard Paton

Happy Wednesday! I hope you continue to find my Blog useful… and that your shares served you well during the summer.

Unfortunately, my portfolio has not exactly sizzled during the last three months.

In particular, notable price advances from Andrews Sykes and Mincon were offset by further declines at System1 and Tasty. Elsewhere, highly rated holdings FW Thorpe and Tristel have come off the boil, while stagnant positions Mountview Estates and Oleeo remain, well, stagnant.

It has all meant that, nine months into the year, I am up 4.4% versus a 1.0% total return produced by the FTSE 100*. No doubt about it, my gains this year have been far from stellar. But following two years of lagging the index, I will happily take my current outperformance for 2018.

Recent RNSs from my shares have been broadly positive. Once again there was a mix of satisfactory to lacklustre statements, and I am glad no major horror stories emerged.

And I did venture to one AGM, which helped prompt my portfolio’s only Q3 trading.

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Andrews Sykes: I Had Expected H1 Sales To Grow By More Than 7% Following The Heavy Snow And Extended Heatwave

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01 October 2018
By Maynard Paton

Update on Andrews Sykes (ASY).

Event: Interim results for the six months to 30 June 2018 published 28 September 2018.

Summary: Widespread snow followed by a glorious heatwave were always going to prompt demand for ASY’s heating products and air conditioners during this first half. However, I did expect the equipment hire firm to have recorded sales growth in excess of the 7% actually reported. Still, operating profit gained 14% while the accounts continue to showcase high margins and surplus cash. Plus, the second-half ought to show bumper figures and help deliver the firm’s best-ever annual performance. I continue to hold.

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S & U: H1 Figures Show Write-Offs Soaring 32% But I Am Happy To Collect A 4.4% Income After The Dividend Was Lifted 14%

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28 September 2018
By Maynard Paton

Update on S & U (SUS).

Event: Interim results and presentation for the six months to 31 July 2018 published 25 September 2018.

Summary: SUS reported satisfactory first-half progress, with the group’s main car-loan division now set to deliver its 19th consecutive year of growth. The performance was accompanied by the usual drawbacks — tighter underwriting leading to fewer new customers, and debt write-offs continuing to soar (this time by 32%). The group’s boss reckons we’re at a “relatively late stage of the economic cycle”, too. Still, I remain happy to collect the 4.4% yield and back the veteran directors who carefully steward their £134m family shareholding. I continue to hold.

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Tasty: Hapless Restaurant Chain Reveals Dismal H1 Loss Although Some Outlets Are Apparently ‘Outperforming Expectations’

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25 September 2018
By Maynard Paton

Update on Tasty (TAST).

Event: Interim results for the 26 weeks to 1 July 2018 published 21 September 2018.

Summary: The hapless restaurant chain delivered a rather dismal — but not completely disastrous — set of first-half figures. “Unfavourable” weather was partly blamed for underlying sales falling approximately 4%, which in turn led to an operating loss. The numbers also carried a further substantial write-down while net debt jumped following adverse cash movements. But recovery hopes still remain — costs have been cut, menus have been re-jigged and some sites are even “outperforming expectations”. I continue to hold.

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FW Thorpe: ‘Excellent’ 2018 Results Show Underlying 2% Profit Advance And Claim Sales Of High-Tech Systems Have ‘Rocketed’

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21 September 2018
By Maynard Paton

Update on FW Thorpe (TFW).

Event: Preliminary results for the twelve months to 30 June 2018 published 20 September 2018.

Summary: The specialist lighting manufacturer delivered its fifth consecutive year of record results, although describing an underlying 2% profit advance as “excellent” overplayed the performance somewhat. Still, the figures were a touch better than I had expected and showcased all the usual financial attractions — decent margins, vast surplus cash and robust reinvestment returns. Sales of some new high-tech products apparently “rocketed”, too. That said, TFW suffered mixed divisional performances while the share-price rating remains rich. I continue to hold.

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M Winkworth: Revenue Jumps 10% To New H1 Record As Online Rivals Now Described As ‘Digital Experiments’

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13 September 2018
By Maynard Paton

Update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2018 published 12 September 2018.

Summary: These results were quite satisfactory and actually revealed record first-half revenue — despite the estate-agency group remaining dependent on London’s difficult property market. In fact, the confident management narrative said sales commission rates had increased and also described online rivals as “digital experiments”. Meanwhile, the accounts seem in decent shape, the outlook appears relatively encouraging and the valuation is hardly extended. I continue to hold.

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[SharePad] Screening For My Next Long-Term Winner: CMC Markets

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11 September 2018
By Maynard Paton

Good news — SharePad wanted a second article!

This time I have looked at CMC Markets (CMCX), a high-margin, cash-rich and owner-run spread-betting firm. Let me explain how I pinpointed the share, and what I discovered through SharePad.

Simply click here to read my CMC Markets article for SharePad.

Maynard Paton

[SharePad] Screening For My Next Long-Term Winner: Ramsdens

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31 August 2018
By Maynard Paton

I have started writing articles for SharePad!

My decision to join SharePad was not difficult. I have used the investment software since 2015 and consider it to be an exceptional service for private investors. I also rate the educational and analytical articles that SharePad has become renowned for.

My SharePad articles will cover my stock-screening efforts — tracking down respectable companies that offer attractive financials, capable managers, reasonable prospects and modest valuations. I hope you find what I write useful.

The articles will probably replace my Watch List reviews, which I admit have been somewhat infrequent of late. I would like to think a return to proper schedules and deadlines will increase my content output…

…and in doing so help me find decent buying opportunities and improve my investment returns!

I will post a link on this Blog to every SharePad article that I write. I kick off with a review of pawnbroker Ramsdens (RFX). Simply click here to read my debut piece for SharePad.

Maynard Paton

Mincon: Satisfactory H1 Results Showcase 12% Underlying Sales Growth And Operating Margin Reaching 19%

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23 August 2018
By Maynard Paton

Update on Mincon (MCON).

Event: Interim results for the six months ending 30 June 2018 published 13 August 2018.

Summary: MCON extended its bumper 2017 progress with some very satisfactory first-half figures. The specialist drill manufacturer claimed greater orders from the mining sector had supported 12% organic sales growth, while my sums suggested a robust 19% operating margin was reached during the second quarter. In addition, current trading appears healthy and a recent acquisition may have performed much better than expected. However, a P/E in excess of 20 probably reflects all of the positives, especially given cash conversion remains below par. I continue to hold.

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City Of London Investment: Fees Cut, Forecasts Reduced, Funds Underperform… But Lifted Dividend Offers 6.8% Income

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01 August 2018
By Maynard Paton

Update on City of London Investment (CLIG).

Event: Trading update and shareholder presentation/summary results for the year ending 30 June 2018 published 17 July 2018.

Summary: Bumper first-half figures and subsequent monthly updates had already ensured the fund manager’s summary annual results would be positive. However, the second half did witness funds under management decline and the group’s own projections for the coming year have now been reduced. In addition, client fees have been cut once again while the main emerging-market strategy continues to underperform. I still hope that, one day, this cash-rich, high-margin business can attract meaningful new mandates to spark a share-price re-rating.  Until then, a 6.8% income remains available. I continue to hold.

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Daejan: NAV Hits New £111 Per Share Peak As £64 Share Price Offers Theoretical 14% Earnings Yield

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27 July 2018
By Maynard Paton

Update on Daejan (DJAN).

Event: Preliminary results for the year to 31 March 2018 published 17 July 2018

Summary: The commercial property group once again left its numbers to do most of the talking, as new all-time highs for revenue, net asset value and the dividend were accompanied by only two paragraphs of management commentary. A bonus this year was US tax changes adding £40m to the balance sheet, which now stands at £111 per share and continues to dwarf the £64 share price. Conservative borrowing levels, veteran family management and an illustrious track record remain the foundations of this investment, and, in theory at least, a 14% earnings yield is available, too. I continue to hold.

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Tristel: ‘Core’ 2018 Revenue May Have Advanced 18% As The Chairman Looks To Sell His (Now) 15% Shareholding In An ‘Orderly Manner’

20 July 2018
By Maynard Paton

Update on Tristel (TSTL).

Events: Trading update for the year ending 30 June 2018 published 13 July 2018, director share sales published 16 July 2018 and shareholder open-day presentation hosted 17 July 2018.

Summary: Earlier this week I attended TSTL’s third annual open day, and this year the event was accompanied by news of hefty director selling as well as confirmation of record revenue and profit. The chairman has reduced his shareholding from 19% to 15%, and confirmed he is looking to sell more during the next few years. The marquee presentation did not provide any great revelations, but one slide did show a useful sales comparison between the UK and overseas, while another slide suggested full-year sales of the group’s ‘core’ disinfectants had just advanced an impressive 18%. I continue to hold.

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Q2 2018: 1 Sell And Some Thoughts On Pension Deficits

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30 June 2018
By Maynard Paton

Happy Saturday! I hope you continue to enjoy my Blog… and that your shares have been sizzling higher during the recent hot weather!

My portfolio has been simmering nicely throughout the last three months. In particular, positive second-quarter contributions from Bioventix and Getech have now added to the decent first-quarter efforts of M Winkworth, Mincon and Tristel. However, System1 has sadly joined Tasty as a notable 2018 loser.

It has all meant that, half way through the year, I am up 6.7% versus the FTSE 100 returning 1.7%. I am glad to be in positive territory following a tricky Q1, and I trust I can maintain a gap to the market during the second half.

Recent RNSs from my shares have been broadly positive. Once again there was a mix of statements, ranging from very satisfactory to rather lacklustre, and I am very happy that no major horror stories emerged!

There was one underwhelming update, though, which prompted a disposal and my portfolio’s only Q2 activity. Let me explain what has happened.

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Mountview Estates: 2018 Dividend Lifted 33% As Boss Admits Company Has A ‘Finite Life’

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19 June 2018
By Maynard Paton

Update on Mountview Estates (MTVW).

Event: Preliminary results for the twelve months to 31 March 2018 published 14 June 2018

Summary: This RNS was more interesting for the management comments — all 626 words — than the actual 2018 financials. Indeed, MTVW’s chief exec is probably the first-ever boss to tell shareholders their business has a “finite life” and had essentially operated in an ex-growth market for 30 years. Hardly inspirational stuff… until you realise the dividend was lifted 33% and has now grown 47-fold during the last three decades. Mind you, this property-trading specialist will at some point have to call it a day — and dissolve an estate that could be worth almost double the current share price. I continue to hold.   

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Castings: The 25-Year Dividend Record Now Shows 23 Increases, 2 Holds And No Cuts

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15 June 2018
By Maynard Paton

Update on Castings (CGS).

Event: Final results for the twelve months to 31 March 2018 published 13 June 2018

Summary: These results came in below the engineer’s earlier expectations — but the performance did not appear too bad in the circumstances. Although CGS’s smaller machining division continues to lose money, its problems now look to be contained. Meanwhile, the larger foundry operation seems to be progressing well following a decent second half. A hefty cash position and the illustrious dividend remain key attractions, but the P/E of 13 does not suggest an immediate bargain. I continue to hold.

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System1: Boss Blames Buffett-Backed Bid For Client Cutbacks And 72% Profit Crash

08 June 2018
By Maynard Paton

Update on System1 (SYS1).

Event: Annual results for the twelve months to 31 March 2018 published 01 June 2018

Summary: A series of poor updates had already heralded what SYS1’s founder described as a “miserable” performance. However, shareholders did receive a candid explanation of what went wrong — with a Warren Buffett-backed bid to buy Unilever taking some of the blame. However, a greater concern is whether SYS1’s pioneering market-research techniques remain that pioneering — the competition is apparently catching up. A lot now rests on whether SYS1’s founder has the ability to lead another recovery. I continue to hold.

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Initial Reviews: AIREA, Octagonal And Richoux

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25 May 2018
By Maynard Paton

Today I am experimenting with a new Blog-post format that covers short-ish reviews of three different companies.

The shares involved this time are all small-caps:

* AIREA (AIEA): This flooring group recently received bid interest from quality operator James Halstead. Although the share price seems cheap and offers asset backing, there is no evidence yet of any long-term business qualities.

* Octagonal (OCT): High margins, attractive growth and net cash are among the attractions at this niche financial-services firm. However, management’s ‘connections’ are not those you would associate with tip-top executives.

* Richoux (RIC): A bombed-out share price and Kaye family involvement bring me to this somewhat muddled restaurant group. Can the new boss lead a turnaround… and repeat the multi-bagger success he enjoyed at Prezzo?

Let’s see if any of this trio are worthy of further investigation.

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Andrews Sykes: 2017 Results Showcase 11% Profit Growth, A 24% Margin And £20m Net Cash

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18 May 2018
By Maynard Paton

Update on Andrews Sykes (ASY).

Event: Preliminary results for the twelve months to 31 December 2017 published 18 May 2018

Summary: These results were quite satisfactory, although sadly the record figures I had hoped for did not entirely come through. Indeed, after a bumper first half, I note the second half could only match last year’s H2. Nevertheless, I was pleased the specialist hire group did not have to rely on “significant extremes in climatic conditions” to stimulate extra demand for its air conditioners, heaters and pumps. Meanwhile, margins remain high at 24%, net cash has grown to a hefty £20m and a 14x cash-adjusted P/E does not seem that excessive. I continue to hold.

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Best Of The Best: The Chief Exec Enjoys A 50% Shareholding And Has Quadrupled Online Sales During The Last 5 Years

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16 May 2018
By Maynard Paton

Today I am continuing my hunt for Watch List shares by looking at Best of the Best (BOTB).

Here are the initial attractions that prompted this research:

* Long-time entrepreneurial ownership: The chief exec established the group during 1999, has been in charge ever since and continues to boast a 50% shareholding.

* Worthwhile growth history: Online sales quadrupled in value between 2012 and 2017 and currently represent 82% of total revenue.

* Conservative funding: The accounts have regularly showcased net cash and special dividends, and may in time enjoy a VAT reclaim windfall.

As usual, I am applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I am looking for as many Yes answers as possible.

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World Careers Network: I Am Locked Into A 35% Loss Following A Stupid Company Rebranding And Likely End Of A Major Contract

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01 May 2018
By Maynard Paton

Update on World Careers Network (WOR).

Event: Interim results for the six months to 31 January 2018 published 30 April 2018

Summary: Yet again the recruitment software developer delivered results that warned of greater costs and lower client fees. However, this statement was also accompanied by details of a company rebranding — which seems a complete joke project to me. Instead, management really should be addressing why the firm looks to have lost its largest customer. I have sat on a 35% loss here for three years now, and have been taught a tough lesson about illiquidity. Sadly I continue to hold.

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Record: Alarming 10% Fee Cut Smells Of Management Guff And I Have Sold Out

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20 April 2018
By Maynard Paton

Update on Record (REC).

Event: Trading update for the three months to 31 March 2018 published 20 April 2018

Summary: REC has struggled to make any decisive progress for several years now. The firm’s currency-trading strategies have floundered, clients have regularly jumped ship, while those clients that have stayed have demanded lower fees. Now comes the alarming news that REC’s bog-standard currency-hedging service will cut its fees by 10% to keep clients happy. To add insult to injury, greater costs will be required to cater for this product “enhancement”. I have been frustrated with REC for quite some time, and have belatedly decided enough is enough. I have sold my entire holding.

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