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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring Morgan Sindall, EVR Holdings, Close Brothers and Hardide.

by David Campbell, Selin Bucak on Nov 06, 2017 at 05:01

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Morgan Sindall

Veteran dividend seekers Clive Beagles and James Lowen have pared their stake in regeneration and engineering firm Morgan Sindall (MGNS) as its shares defied sector gloom to rerate 100% higher this year.

The duo reduced their stake in the business from just over 10% of shares to 9.9% or 4.4 million worth £67 million at a share price of £15, double the 745p which it began the year.

The shares are held in their £3.3 billion JOHCM UK Equity Income fund, one of the top three holders of the stock. After climbing steadily this year Morgan Sindall received another leg-up this month as it said it was raising its full-year profit forecast following a 5% increase in its order book in the year to date.

Chief executive John Morgan said that the business had bucked a construction slowdown by focusing on ‘smaller contracts’ and staying picky in what it bid for.

Following the update Jeffries lifted its target price from £15.89p to £16.84p.

Key stats
Market capitalisation£127m
No. of shares out1,334m
No. of shares floating631m
No. of common shareholdersnot stated
No. of employees14
Trading volume (10 day avg.)11m
Turnover£m
Profit before tax£-3m
Earnings per share-0.03p
Cashflow per share-0.03p
Cash per share0.36p

EVR Holdings

UK small-company managers Paul Marriage and John Warren have raised their position in virtual reality firm EVR Holdings (EVRH) following a £10 million capital raising.

Marriage, previously Citywire A-rated, and Warren have increased their holding in the company to 5.4% or 62.5 million shares. These are worth £5.9 million at a share price of 9.45p. Previously Schroders held 18.75 million shares.

Most of the shares are held in their Schroder UK Dynamic Absolute Return fund.

The shares of EVR Holdings are up 199% over one year. In October, the virtual reality content creator raised £10 million, before expenses, by placing 125 million new ordinary shares at a price of 8p per share.

The placing is expected to enable MelodyVR, the firm’s subsidiary, to invest in the creation of its original content library and extend its capabilities both in the UK and internationally.

Chief executive Anthony Matchett commented: ‘The capital raised as part of this placing will be used to further accelerate our expansion and will enable MelodyVR to enter new foreign markets including territories throughout Asia, Australasia and Latin America more quickly.’

Key stats
Market capitalisation£2,103m
No. of shares out152m
No. of shares floating148m
No. of common shareholdersnot stated
No. of employees3114
Trading volume (10 day avg.)1m
Turnover£579m
Profit before tax£363m
Earnings per share127.50p
Cashflow per share165.60p
Cash per share531.83p
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Close Brothers

Citywire A-rated dividend veteran Martin Cholwill has upped his stake in merchant bank and fund manager Close Brothers (CBG) as its shares slide back toward a 12-month low.

Cholwill raised his holding from 4.9% to just above 5% of the company. This gives him a stake of 7.6 million shares, worth £105 million at a share price of £13.86. The stock has fallen 18% from a record high of £17.15 in May.

The shares are primarily held in his £1.9 billion Royal London UK Equity Income fund. Cholwill has been a fan of the wealth management sector’s relatively predictable income for some years.

‘Close has [also] benefitted from the withdrawal of banks like HBOS which were very big in specialist lending pre-credit crunch,’ he wrote in 2014. <‘Close has been able to grow its loan book by 10% per annum because the competitive environment is a lot less fierce.’

Canaccord Genuity initiated coverage of Close with a buy last month on a target price of £17.50.

Key stats
Market capitalisation£29m
No. of shares out1,535m
No. of shares floating798m
No. of common shareholdersnot stated
No. of employees35
Trading volume (10 day avg.)1m
Turnover£2m
Profit before tax£-1m
Earnings per share-0.10p
Cashflow per share-0.07p
Cash per share0.13p

Hardide

Amati’s team of Citywire AAA-rated small cap stockpickers has ramped up the company’s stake in specialist coatings manufacturer Hardide (HDD) as its shares drift from a three-year high this summer.

The managers lifted their holding in the business from 9.3% to just over 11%. This gives them a stake of 180 million shares worth £3.2 million at a price of 1.8p, down from a June peak of 2.1p.

The shares are held in Amati’s tax-efficient venture capital trust, led by AAA-rated managers Dr Paul Jourdan, David Stevenson and Douglas Lawson.

Hardide provides ultra-hardwearing protective coats for engineering components used by industries such as oil and gas extraction and aviation. The business last week said that it had raised £2.5 million in an oversubscribed placing as it sought funding for a US expansion.

The business has inked a number of new deals this year as a rising oil price lifted sector expenditure. House broker finnCapp holds the business on a price target of 2.1p.

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  • EVR Holdings PLC (EVRH.L)
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  • Close Brothers Group PLC (CBRO.L)
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  • Hardide PLC (HDD.L)
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  • Morgan Sindall Group PLC (MGNS.L)
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