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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring McBride, Mortgage Advice Bureau, Telecom Plus and Communisis

by David Campbell, Selin Bucak on Nov 20, 2017 at 05:00

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Key stats
Market capitalisation£390m
No. of shares out182m
No. of shares floating180m
No. of common shareholdersnot stated
No. of employees4125
Trading volume (10 day avg.)m
Turnover£705m
Profit before tax£61m
Earnings per share4.87p
Cashflow per share15.86p
Cash per share14.28p

McBride

Citywire A-rated microcap star Philip Rodrigs has booked some profit on his stake in own-brand household staples manufacturer McBride (MCB) as its shares have soared to a record high.

The manager cut his investment in the business from just under 6% to 4.3%. The holding of 7.9 million shares is worth £16.8 million at a share price of 213p, up 35% from a January low of 155p.

The shares are held in his £887 million River & Mercantile UK Equity Smaller Companies fund, which has derived most of its out-performance from the position in recent months.

After trading sideways to down for much of the year McBride has staged a dramatic comeback since issuing a better-than-expected update on its turnaround programme in early September.

Despite the bounce it still trades at 13 times forecast earnings, versus a sector average of almost 17. Liberum reiterated its ‘buy’ rating on the stock this month on a price target of 260p.

Key stats
Market capitalisation£270m
No. of shares out51m
No. of shares floating31m
No. of common shareholdersnot stated
No. of employees141
Trading volume (10 day avg.)m
Turnover£93m
Profit before tax£12m
Earnings per share25.21p
Cashflow per share25.63p
Cash per share21.42p

Mortgage Advice Bureau

Citywire AAA-rated value investors Anthony Cross and Julian Fosh have upped their stake in home lending broker the Mortgage Advice Bureau (MAB1) as its shares climb to a fresh record high.

The Liontrust fund managers increased their holding in the business from just over 17% of shares to 18.1%. The position of 9.2 million shares is worth £49.4 million at a share price of 537p, up 55% this year.

The shares are held in their £789 million Liontrust UK Smaller Companies and £3.1 billion UK Special Situations funds. Across the mandates, the duo are the largest external investors of the business.

Canaccord Genuity upped its target price on the Mortgage Advice Bureau from 520p to 535p in September, on a ‘buy’ rating. That followed an update from the business reporting profit before tax up 19% to £6.3 million in the first half of the year on revenue 15% higher at £49.6 million.

Key stats
Market capitalisation£945m
No. of shares out78m
No. of shares floating54m
No. of common shareholdersnot stated
No. of employees1049
Trading volume (10 day avg.)m
Turnover£740m
Profit before tax£57m
Earnings per share37.81p
Cashflow per share56.81p
Cash per share23.29p

Telecom Plus

Citywire AAA-rated smaller company star investor Harry Nimmo has upped his stake in Telecom Plus (TEP) as shares in the utility supplier claw their way back to the top of a volatile three-year range.

Nimmo increased his investment in the company from 8.6% of shares to just over 10%, a position of 7.8 million shares worth £94.6 million at a share price of £12.13. The shares slipped 49p, or 3.9% on Friday but have advanced from September’s year-low of £10.69.

The shares are held in Nimmo’s £1.3 billion Standard Life Investments UK Smaller Companies fund, with a further holding in his £343 million Standard Life UK Smaller Companies investment trust.

Telecom Plus has chopped and changed in a range from as high as £13 to as low as 768p over the last three years. After climbing hard over the prior year the shares dropped 13% in June after the company scaled back a planned return of capital from £70 million to £25 million, citing the low visibility of political risk.

Broker finnCap rates the company a ‘buy’ on a price target of £13.90.

Key stats
Market capitalisation£128m
No. of shares out209m
No. of shares floating139m
No. of common shareholdersnot stated
No. of employees2164
Trading volume (10 day avg.)3m
Turnover£362m
Profit before tax£29m
Earnings per share4.12p
Cashflow per share9.25p
Cash per share18.29p

Communisis

Citywire A-rated European equity veteran Richard Pease has emerged with a chunky position in print marketing business Communisis (CMS) as its shares hit a two-year high, following a profit warning last year.

Pease increased his stake to 5.7% with a holding of 12 million shares worth £7.3 million at Friday’s close of 61p. The shares have rallied from a low of 34p in August last year but are still below their early 2014 peak of 75p.

Pease runs the £173 million Crux European and £1.9 billion Crux European Special Situations funds. The stake is held in a £100 million portfolio outsourced to him last month by investment company Witan.

Shares in Communisis have climbed 66% over the last 12 months, after the company spent 2016 grappling with a ballooning pensions deficit and paying down debt, which peaked at almost £40 million.

That has since fallen to £28.3 million and been restructured over a longer repayment period, while profit climbed 10% to £8.5 million in the first half. Analysts at Liberum rate Communisis a ‘buy’ on a price target of 74p.

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  • McBride PLC (MCB.L)
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  • Mortgage Advice Bureau (Holdings) PLC (MAB1.L)
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  • Telecom Plus PLC (TEP.L)
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  • Communisis PLC (CMS.L)
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