Good morning. Firstly, a reader notified me yesterday to say that my "Follow By Email" service provided by Google is malfunctioning, and is sending out updates 4 or 5 hours late, so people are only getting the updates from here in mid-late afternoon! This is a nuisance, as most days I rush to publish as early as I can, as the information is time-sensitive. I've lodged a complaint with Google, and hope that they fix it soon. So my apologies for that.
However, in the meantime I also notify new posts have been published immediately on Twitter. So if you follow me @paulypilot on Twitter, then you will always be notified as soon as new posts are published.
Or, just check the front page here around 8am onwards, Part 1 is usually posted around 8-9am.
If anyone can suggest a better email feed service that will be more reliable than Google's, and is easy to set up, then let me know & I'll try to switch over to that.
It never rains but it pours, and my trusty Dell laptop has finally given up the ghost, so am using my backup laptop with no pound sign on the keyboard, so as from now assume all figures are in GBP unless stated otherwise, and expect more typos as the keyboard is ropey!
Please also note the new links to Motley Fool on the right hand side - "my" discussion board there, called Paulypilot's Pub, is a great resource, full of very smart investors, and we're getting it going again after a period of withering on the vine. So do please pay us a visit there, and contribute to the discussion.
Brainjuicer (BJU) is a 42m mkt cap (at 337p/share) market research company. Interim results are pretty solid, with good percentage growth in profits, but on very small numbers. They confirm full year guidance, but broker consensus is 16p EPS, giving a hefty PER of 21. Also the year is heavily weighted to H2, so that increases the risk. Much too pricey for my liking. Why pay such a premium, when there are so many good companies out there on a PER of 10?
I've always admired lighting company, F W Thorpe (TFW), which seems impervious to Recession, producing solid results year after year. They've delivered again, with an 18% increase in EPS to 84.8p. The shares are currently down 5% at 1000p, so the PER looks reasonable at 11.8
Total dividends of 19.4p (up 10%) gives a divi yield of 1.9%, which is perhaps a tad stingey, but worth having I suppose. They also say that the last 2 months of the year were slow (but has since returned to normal), so perhaps that is why the shares are down today. The balance sheet is a thing of beauty, stuffed full of cash, around 31.2m net cash, that's 27% of the market cap! I do enjoy a strong balance sheet, and this one is lovely - get this - current assets of 53.7m (over half of which is cash), and total liabilities of 10.0m! So quite why they are so tight with dividends, when there is pots of cash sitting there doing nothing, is beyond me! If I were a shareholder, I would be pushing for a substantial (i.e. doubling or more) increase in the dividend.
So overall, TFW looks a good long-term investment to me, even though the shares have done well over the last few years. Good growth company, reasonably priced.
Suits retail & hire company Moss Bros (MOSB) is one of those old fashioned names that one assumed would have gone bust by now. But actually they are doing OK. At 46p the mkt cap is 46m.
Interim operating profit fell 5% to 2.0m, which is surprising given the positive LFL sales achieved, but it seems to be due to higher cost prices leading to gross margin falling 2.2%. The current trading statement is OK, and they confirm full year expectations.
Net cash is more than half the mkt cap at 26m, although it should be noted that the choice of year end 31 Jan, gives seasonal peaks in cash at both year end and interim period end. So I imagine the average cash balance during the year is somewhat lower.
The PER looks a bit toppy to me, 29 falling to 17 next year, although if you strip out net cash, it looks more reasonable. I cannot see a great deal of upside on these shares, so not for me.
Advertising & marketing group M&C Saatchi (SAA) reports solid results. 101m mkt cap at 160p/share. EPS is up 11% to 7.95p for H1. So looks like they are on track this year, which means the forecast PER is 10, and divi yield about 3%. Looks good value for such a big name company.
Although I did note some "funnies" on their balance sheet, quite big liabilities relating to a put option for a minority shareholder. So that would need further investigation before taking this any further.
OK that's it for this morning, sorry it's so late, usual service resumes tomorrow!
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