Daejan: NAV Reaches New £119 Per Share High But Management Remarks Of Slowing Growth Now Leaves Price-To-Book At 46%

14 August 2019
By Maynard Paton

Results summary for Daejan (DJAN):

  • These full-year figures set new records for revenue, up 9%, net asset value, up 7% and the dividend, up 3%.
  • The 3.5% valuation gain was DJAN’s lowest since 2012 following the “uncertainty” caused by Brexit. Management remarks suggested current-year growth could slow further.
  • A significant purchase in the States has lifted the proportion of US properties to 29% of the group’s estate.
  • The accounts remain conservatively financed and the property valuations continue to appear prudent.
  • The share price represents only 46% of net asset value — the lowest percentage for seven years. I continue to hold.

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

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09 August 2019
By Maynard Paton

Quality companies undergoing temporary problems can often become attractive investment opportunities.

On that basis, perhaps AG Barr is worth closer inspection.

The soft-drinks manufacturer famous for Irn-Bru recently warned that profits would be lower than expected… and the share price plunged accordingly.

However, AG Barr does boast a quality track record. During the last 40 years for example, the group has lifted its annual dividend by an average 11% — and shareholders have never seen their income cut.

Read my full AG Barr article for SharePad.

Maynard Paton

City Of London Investment: Dividend Yield Still Tops 6% After Mixed 2019 Summary Shows FUM At Record (GBP) High But Fee Rates Sliding Lower

26 July 2019
By Maynard Paton

Results summary for City of London Investment (CLIG):

  • These 2019 summary figures contained no surprises, as lower funds under management (FUM) throughout the year left revenue down 6% and profit down 16%.
  • FUM ironically ended the year at its highest-ever level in GBP terms (£4.2b), as client money once again trickled out of the main emerging-market funds and in to other strategies.
  • The overall fee rate paid by clients slid from 80 basis points to 76 basis points.
  • The accounts continue to sport high margins, a robust return on equity, decent cash flow and net cash.
  • The P/E is approximately 10 and the yield tops 6%, although the shares have traded on a similar rating for years. I continue to hold.

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

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15 July 2019
By Maynard Paton

Imagine this. You find a blue-chip company that offers:

  • 21 years of consecutive dividend increases, with the last ten years showing 10% per annum growth;
  • Management guidance of further 10% annual dividend growth “over the medium term”, and;
  • A share price with a 10% dividend yield.

Too good to be true?

Well, that is the situation at Imperial Brands.

Read my full Imperial Brands article for SharePad.

Maynard Paton

Mountview Estates: 2019 Results Show Encouraging H2 As NAV Climbs To £94 Per Share And Closer To £97 Share Price

15 July 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

  • Brexit “uncertainties” led to MTVW’s lowest annual revenue and earnings since 2013.
  • At least the dividend was held and net asset value reached a fresh £94 per share high.
  • A higher gross margin during the second half was encouraging and may indicate MTVW is enjoying slightly stronger sale prices.    
  • Debt represents a low 12% of the group’s property estate — which continues to be accounted for at cost.
  • My sums suggest MTVW’s balance sheet could actually be worth £200-plus per share — more than double the recent share price. I continue to hold.

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Q2 2019: 1 Sell, 3 Top-Ups And Portfolio Analysis The Fundsmith Way

28 June 2019
By Maynard Paton

Happy Friday! I hope you continue to find my Blog useful… and that your shares are performing well in the current market.

I am pleased my portfolio remains in positive territory this year — although I am still trailing the FTSE 100. So far during 2019, I am up 7.7% while the index is up 13.1%.

My underperformance is due in part to owning companies that are:

  • undergoing potential recoveries (Getech, Oleeo, System1 and Tasty);
  • experiencing flat earnings (Mincon and M Winkworth), or;
  • operating in an unloved sector (Daejan and Mountview Estates).

Those eight shares represent approximately 40% of my portfolio. Add in cash of 7.5% as well, and almost half of my portfolio is marooned far away from the high-flying ‘quality’ growth shares that (seemingly) keep leading the market higher.

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System1: 2019 Results Prompt Awkward Questions After Woeful £3k AdRatings Revenue

25 June 2019
By Maynard Paton

Results verdict on System1 (SYS1):

  • An unspectacular performance with gross profit unchanged and profit rebounding due only to cost cuts.  
  • The new AdRatings service suffered a woeful start after generating revenue of just £3k.
  • The lack of all-round progress prompts awkward questions as to whether the group’s advert-analysis services are actually of much interest to the marketing industry.
  • The accounts remain cash rich and would exhibit respectable ratios were it not for the chunky AdRatings start-up costs.
  • The P/E could be somewhere between 10 and 15 assuming AdRatings one day breaks even (or is scrapped). I continue to hold.

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[SharePad] Screening For My Next Long-Term Winner: JD Sports Fashion

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24 June 2019
By Maynard Paton

Today I am revisiting the share screen that pinpointed Games Workshop back in January.

The shares of the quirky wargaming retailer have soared more than 60% since that review…

…and I wonder whether the same screen can unearth another promising opportunity.

This time the screen returned 26 matches, and I plumped for the largest on the list — sports retailer JD Sports Fashion.

JD’s earnings per share have surged from 6p to 27p — an average of 35% per annum — during the last five years.

Read my full JD Sports Fashion article for SharePad.

Maynard Paton

[SharePad] Screening For My Next Long-Term Winner: Jupiter Fund Management

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16 June 2019
By Maynard Paton

Today I have revisited a share screen that applies two ratios favoured by ‘quality’ investors — operating margin and return on equity (ROE).

The exact criteria I re-used were:

1) An operating margin (latest and 10-year average) of 20% or more, and;
2) An ROE (latest and 10-year average) of 20% or more.

This time I have pinpointed Jupiter Fund Management, a £1.7 billion fund manager with a mighty 41% operating margin and a robust 24% ROE.

Read my full Jupiter Fund Management article for SharePad.

Maynard Paton

[SharePad] Screening For My Next Long-Term Winner: Domino’s Pizza

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24 May 2019
By Maynard Paton

My latest SharePad article covers one of the most impressive UK growth stocks of the last 20 years — Domino’s Pizza.

Domino’s appeared on my radar after I revisited one of my previous SharePad screens.

The screen in question searched for companies with dependable dividends and reasonable yields.

I selected Domino’s because I was already aware of the pizza chain’s dynamic growth history — and wondered why the shares had fallen to offer a useful, 4%-plus dividend income.

Read my full Domino’s Pizza article for SharePad.

Maynard Paton

Andrews Sykes: 2018 Results Show Profit Rising 18% To New High But Absence Of ‘Cautiously Optimistic’ Outlook Hints At Weaker 2019 Figures

22 May 2019
By Maynard Paton

Results verdict on Andrews Sykes (ASY):

  • Very favourable weather helped revenue gain 10% and profit jump 18% to set new records.
  • European sales soared 24% to represent almost a quarter of the business, and continue to offer further potential.
  • Accounts showcased wonderful margins, robust returns on equity, reassuring cash levels and respectable cash flow. 
  • Absence of “cautiously optimistic for further success” within management’s outlook hinted that 2019 may not be as buoyant as 2018.
  • The underlying P/E could be 16 while the yield is 3.3%. I continue to hold.

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

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10 May 2019
By Maynard Paton

For this SharePad search I re-used the screen I employed to pinpoint Victrex.

The filter focuses on two ratios favoured by ‘quality’ investors — operating margin and return on equity (ROE).

This time I selected Abcam, a £2.6 billion AIM company that develops and sells antibodies.

Abcam boasted a super 30% operating margin and a robust 20% ROE.

Read my full Abcam article for SharePad.

Maynard Paton

Getech: 2018 Results Showcase Impressive 24% Products Revenue Gain But Full Profit Recovery Remains Dependent On Stronger Oil Price

10 May 2019
By Maynard Paton

Results verdict on Getech (GTC):

  • Total revenue gained 11% to set the highest level since 2015. The dominant and more attractive Products division impressed with a 24% revenue improvement.
  • Progress was achieved in particular by a last-gasp $3.2m sale that contributed approximately 30% to the top line.
  • Profit was hampered by the loss-making Services division, although significant cost savings have since been made.
  • The direction of the oil price may largely dictate whether GTC’s oil-exploration software sells well (or not) during 2019.
  • The £11m market cap requires greater earnings to underpin obvious upside potential. I continue to hold.

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Oleeo: 155-Word H1 Statement Could Strangely Mark The Low Point For Earnings As £13m Market Cap Compares To £11m Net Cash Position

07 May 2019
By Maynard Paton

Results verdict on Oleeo (OLEE):

  • A terse 155-word statement revealed an unsurprising 50% profit plunge as OLEE extends its “capacity to suffer” to four years.
  • At least revenue continues to inch ahead and might even be growing at a reasonable pace if the largest customer is excluded.
  • Recent client installations include all four Welsh police forces — cementing OLEE’s 50%-plus share of supplying UK police recruitment IT.
  • A lack of guidance for the full-year could strangely mark the low point for earnings. 
  • A £13m market cap is almost entirely supported by the £11m net cash position. I continue to hold.

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

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27 April 2019
By Maynard Paton

For this market trawl I employed two ratios favoured by ‘quality’ investors.

The first measure was operating margin, which represents the percentage of sales converted into profit.

The second measure was return on equity, or ROE, which is calculated by dividing earnings by the shareholder equity used to produce those earnings.

I used SharePad to identify a suitable company, and selected Victrex — a £2 billion specialist manufacturer of high-performance polymers — for further investigation.

Victrex offered a wonderful 39% operating margin and a robust 23% ROE.

Read my full Victrex article for SharePad.

Maynard Paton

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