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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring Provident Financial, CVS Group, Synectics and Ramsdens

by Selin Bucak, David Campbell on Dec 18, 2017 at 05:00

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Key stats
Market capitalisation£1,215m
No. of shares out148m
No. of shares floating143m
No. of common shareholdersnot stated
No. of employees3261
Trading volume (10 day avg.)1m
Turnover£1,183m
Profit before tax£350m
Earnings per share179.95p
Cashflow per share197.54p
Cash per share151.38p

Provident Financial

Neil Woodford, the UK’s hotly-followed fund manager, has increased his position in beleaguered sub-prime lender Provident Financial (PFG) after it took lurched lower on a regulatory probe.

Woodford increased his holding by just over 1% to 22%, equating to 32.7 million shares. At a share price of 818p, it is worth £267.5 million. Provident Financial’s share price is down substantially from its peak of £32.65 in May.

The shares are primarily held in the £8 billion CF Woodford UK Equity Income fund, which owns the business as a top 10 position. The manager has seen his short term performance take a beating this year as a series of favoured stocks have come a cropper, not least Provident Financial.

The former stock market darling shocked investors when it warned earlier this year that an internal organisation had left the firm struggling to recover money owed to it. Shares recovered to 931p in October but slid again this month after it said regulators were investigating its car finance business.

Key stats
Market capitalisation£674m
No. of shares out64m
No. of shares floating62m
No. of common shareholdersnot stated
No. of employees4841
Trading volume (10 day avg.)1m
Turnover£272m
Profit before tax£42m
Earnings per share18.24p
Cashflow per share52.97p
Cash per share10.64p

CVS Group

Citywire AAA-rated small cap veteran Harry Nimmo has upped his stake in national veterinary business CVS Group (CVSG).

The move followed a 25% share price tumble for CVS after it warned of a weaker outlook. Nimmo increased his investment from 10.7% to just over 11%, equating to seven million shares. With a share price of £10.50, down from a record high of £14.90 in November, the stake is worth £73.9 million.

The shares are held in Nimmo’s £1.4 billion Standard Life Investments UK Smaller Companies fund, with a further holding in his £375 million Standard Life UK Smaller Companies trust.

CVS tumbled by as much as 42% in late November after its chair Richard Connell warned investors that the business was struggling to recruit to sustain expansion.

He said the group would be ‘increasing some salaries by more than inflation’ in order to maintain recent breakneck growth rates, although he expected this could be matched by higher pricing. Peel Hunt recently lifted its guidance on the group to a ‘buy’ with a price target of £13.50.

Key stats
Market capitalisation£37m
No. of shares out18m
No. of shares floating8m
No. of common shareholdersnot stated
No. of employees517
Trading volume (10 day avg.)m
Turnover£71m
Profit before tax£5m
Earnings per share8.79p
Cashflow per share20.61p
Cash per share32.86p

Synectics

Small cap specialist Judith MacKenzie has added security and surveillance solutions designer Synectics (SNX) to her portfolio, after the company updated the market on strong year-end results.

The Downing fund manager, previously Citywire AAA-rated, has taken her stake in the business up to 13.14% or 2.3 million shares. With a share price of 200.55p, down from a 52-week high of 294.55p, it is worth £4.6 million.

The shares are held in her Downing UK Micro-Cap Growth fund and the Downing Strategic Micro-Cap Investment trust.

In its latest trading update, Synectics said it would finish the year in line with expectations. The AIM-listed company experienced 10% growth in underlying pre-tax profits over the year to 30 November. Cash at year-end was approximately £3.9 million, up from £2.2 million the previous year.

The board added: ‘After an exceptionally strong year to 30 November 2016, which unusually included two major new casino projects in the Far East, Synectics' performance in the Gaming sector in the financial year just ended was better than anticipated by the Board, as increasing inroads were made with major casino customers in the US.’

Key stats
Market capitalisation£54m
No. of shares out31m
No. of shares floating27m
No. of common shareholdersnot stated
No. of employees552
Trading volume (10 day avg.)2m
Turnover£35m
Profit before tax£6m
Earnings per share7.60p
Cashflow per share13.11p
Cash per share38.47p

Ramsdens

Veteran income investor Chris White has taken profits on north eastern pawnbroker Ramsdens (RFX).

White reduced his holding in the business by 0.8% to 7.8%, or 2.4 million shares. This is worth close to £4.2 million at a share price of 173p, up significantly from its IPO price of 86p.

The shares are primarily held in White’s £405 million Premier Monthly Income fund, with other positions in his £244 million Monthly Income and £102 million Optimum Income funds.

Middlesbrough-based pawnbroker and foreign currency broker Ramsdens reported a 63% increase in its profit before tax in the six months to the end September, to £5.2 million.

Chief executive Peter Kenyon said: ‘Ramsdens has had a strong first half of the financial year with foreign currency exchange, pawnbroking and retail jewellery all showing good growth.’

Liberum lifted its target price on the stock from 190p to 240p following the announcement.

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  • Provident Financial PLC (PFG.L)
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  • CVS Group PLC (CVSG.L)
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  • Synectics PLC (SNXS.L)
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  • Ramsdens Holdings PLC (RFXR.L)
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