No Pain, No Gain; A stark reminder of stock market unpredictability
Saturday 19 August 2006
A busy few weeks for the No Pain, No Gain portfolio has, unfortunately, failed to produce much cheer. Indeed, Access Intelligence, the only constituent to offer clear trading encouragement, went on to damage stock-market sentiment by producing a marginally bearish statement that created a surprising degree of share turbulence.
Admittedly, Access, a small computer-services group, has been a disappointment. The shares were recruited at 9p, touched 11p, but now bump along at just 5p. Yet the company appears to be trading well and looks to be capable of delivering on its promises.
At the interim stage, adjusted pre-tax profits came in at £200,000 against a corresponding loss last year of £8,000. The chairman Jeremy Hamer made positive noises about prospects, and the group appears to be heading for the signalled £600,000 year's profit.
Its performance attracted a kneejerk share advance to 7p, but a few days later, when it became apparent that a modest 1.2 million shares were likely to be unloaded following a divorce, the price slumped to 4.5p - illustrating that some fledgling stocks are uncomfortably fragile.
I am, of course, saddened to be in the red with Access. Still, I think it is worth hanging on as the stock market is underpricing the shares.
Georgica, the ten-pin bowling and snooker club group, managed to roll out particularly disappointing half-year results, with pre-tax profits emerging at £1.7m, against £3.8m last year. The shares have slipped from their 162p high, but with the possibility of takeover action swirling around, the price should not deteriorate too much.
There is no indication of corporate activity supporting Printing.com, hitherto one of the stars of the portfolio. It will have to rely on a trading revival. A surprise statement revealed that what had previously been described as "mixed" trading had deteriorated to "soft". A hiccup - or the first sign of more wounding difficulties? With the shares around 53p (after 77p), I will, for the time being, give it the benefit of the doubt.
We know that the stock market is an unpredictable place. The vagaries are underlined by the subdued performances of my three constituents. And, if further evidence were needed, Monday's shock from Interserve provided it. Accounting irregularities at the support-services group devastated the shares, delivering yet another blow to former shareholders of MacLellan. As I said last week, it was forced to accept Interserve shares as part of a takeover consideration.
At the time of writing, Interserve shares are 297p (after 265p), a distressing distance from the 382p when the MacLellan bid terms were struck. The portfolio sold its unwanted entitlement at 374.5p, but I suspect that many shareholders, seeking cash instead of shares, were not so lucky. So the rewards they deserved from the deal have been dramatically eroded.
To pile on the agony, it was the integration of MacLellan, a well-run business, that led to the accounting problems being uncovered.
Finally, a little portfolio cheer. Two constituents have been the subjects of favourable forecasts. Equity Development, a research group, has put an 80p target on shares of Myhome International, the franchising group planning to move from PlusMarkets (formerly Ofex) to the Alternative Investment Market (AIM). The current price is around 42.5p. And SQC Research suggests that IDN Telecom should hit 3p this year, 4p next. It's around 2.25p.
Myhome is expanding rapidly. This week it splashed out £200,000 in shares (at 45.5p) for Autosheen. Further payments totalling £300,000 are likely. The car-valeting company, with 15 franchise operators, has substantial contracts.
Russell O'Connell, the chief executive, is keen to increase the franchise spread, and believes the group can accommodate that. Autosheen won't affect this year's profits, which analyst Andy Edmond believes should hit £948,000. Next year, he expects £2.6m, though further deals could overtake his forecast.
The shares have risen from 5.5p at the start of last year, but they still look attractive.
Mark Watson-Mitchell, at SQC, says IDN shares "are clearly undervalued [and] could well attract a bid from another player in a consolidating industry". He sees profits this year hitting £1.175m, with £1.8m in sight next year.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Five Questions: Changes to car tax discs
Bargain Hunter: There's one day left to book a bargain flight with Air Asia
Two million first-time buyers are locked out
How to save money: UK is crashing down the European league table for putting money away
Mark Dampier: When even safety first is a risk, go for income and capital growth
- 1 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 2 Oil tanker with $100 million cargo goes missing off Texas coast
- 3 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
- 4 Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony