Category Archives: On my watchlist

Ms International – MSI – Half year report

Half year report out today. Share price reacted well to the news.
http://www.digitallook.com/news/rns/20516659-12869/MSI-Half_Yearly_Report_html

239p £44m market cap. 10m cash. Healthy asset sheet.

Profits lower than H1 2011 but they have 25% higher value of orders on hand than H2 last year (i wonder if this means they think revenues will be 25% higher than H2 revenues). If so then profit could take a small jump and P/E currently perhaps around 8 would fall to maybe 6 or 5!

Vague I know but I can’t find accurate forecasts and this is a quick glance.

The chairman finishes with a caveat.
“All matters considered, the Board has a good measure of confidence as to the full year outlook for the Group, subject to there being no further deterioration in the global economy that could adversely affect our two industrial engineering divisions.”

PV Crystalox Solar PVCS – Ready to give out cash?

(Figures in Euros unless otherwise stated)

Solar panel maker that has been savaged by cheap Chinese competition. I can’t recall the details of what’s gone on in the industry but essentially there has been mass over supply. At the half year point they had 122m cash. And at a glance about another 100m of assets too. Their strategy seemed to be  to cut costs, reduce production and limp along until prices recovered – using their cash pile slowly. Of course shareholders might like the company to voluntarily fold and cash to be distributed.

First half loss was about 12m. Market capitalisation is £35m.

In the management statement released yesterday ( from the ‘outlook’ paragraph):

‘’The Group has a strong net cash balance and the Board is continuing to reorganise the Group, to enable the return of cash to shareholders. The Board expects to make a further announcement before the year end.’’

From the half year report ‘outlook’ section:

‘’While the Group continues to believe in the positive long-term outlook for PV, it is mindful of the intensely competitive environment which is likely to persist in the short to medium-term and which has already led to many companies exiting the industry, either voluntarily or through insolvency. The Group has a strong net cash balance and the Board will make the necessary decisions during the remainder of the year to serve the best interests of shareholders.’’

This looks like a change of attitude within the company. Just how much cash they might return is a guess at the moment. Of course with a dividend payout the share price will fall but if a payout is announced, then I expect the SP to jump before the ex div date.

Tricorn Group (TCN)- Fall after contract loss overdone?

Tricorn Group (TCN)- Fall after contract loss overdone? TCN revealed the loss of a contract to Rolls Royce at the end of last week. The contract will not be renewed past the end of this year. Price dropped further over the weekend as investors sold and it currently sits at 19p from around 28p a week previous – just over 30% drop.

A poster on the Motley Fool message board posted his opinion that the fool may be overdone:

http://boards.fool.co.uk/you-may-well-be-right-about-avingtrans-taking-over-12677594.aspx

A quick glance at the balance sheet from March 2012 shows roughly £6m assets not including good will of which £2.47m is cash. Compare this to the present market cap of £6.28m. However with £1.7m forecast profit before tax for year ending 2013 and £2.18m for year end 2014 I’m wondering what effect this will have on profit forecasts. Note, the contract has not ended yet so will contribute to this years profit.

It does seem like a large fall for a contract that amounts to 11% of the groups revenue. I don’t have the knowledge to assess just how much this will impact the bottom line so I’m not going to dive in.

Trinity Mirror (TNI) – Superb value, just when to buy?

A favourite value share amongst private investors is Trinity Mirror – owner of the Mirror newspaper and various regionals.

The share price has languished in the twenties this year before taking off and reaching the seventies. The funny thing is, this company is still stupidly cheap with a P/E of just over 2! A great write up can be found here, it’s a little old but the value case still holds true. So why not pile in?

My only quibble is the emergence of phone hacking allegations against the company. Until now TNI has not been prosecuted of sued for these claims. Very recently a lawyer has launched civil claims representing a handful of minor celebrities against TNI. The financial damage is likely to be small, especially when compared to TNI’s cash flow but the fresh allegations sent the share price down 20%. It has since recovered most of that but I am nervous to buy in now, knowing that developments in these allegations could present even better buying opportunities in the coming months.

I’m waiting on the sidelines with interest.