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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring AB Dynamics, Walker Crips, Telecom Plus and McBride.

by David Campbell on Mar 12, 2018 at 05:00

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Key stats
Market capitalisation£172m
No. of shares out19m
No. of shares floating11m
No. of common shareholdersnot stated
No. of employees120
Trading volume (10 day avg.)m
Turnover£25m
Profit before tax£5m
Earnings per share20.56p
Cashflow per share21.97p
Cash per share50.33p

AB Dynamics

Citywire AAA-rated value veterans Anthony Cross and Julian Fosh have taken some profits on vehicle testing and simulation business AB Dynamics (ABDP) as its shares recover from a January correction.

The managers cut their investment in the business from 5% of the shares to 4.9% worth £8.5 million at a share price of 887p, down from an all-time high of £10.82 early this year.

The shares are held in their £825 million Liontrust UK Smaller Companies and £23 million UK Micro Cap funds, collectively a top three holder of the stock

Investors got a sudden case of cold feet on AB Dynamics after driving a six-fold appreciation in its share price over the three years to end 2017. The sell-off cooled the company’s lofty price to earnings multiple from a peak of 52.3 to a still-ambitious 43.5.

Brokers Panmure Gordon and Cantor Fitzgerald both rate the stock a ‘buy’.

Key stats
Market capitalisation£16m
No. of shares out42m
No. of shares floating25m
No. of common shareholdersnot stated
No. of employees184
Trading volume (10 day avg.)m
Turnover£29m
Profit before tax£2m
Earnings per share1.56p
Cashflow per share4.20p
Cash per share21.17p

Walker Crips

Veteran small cap dividend investors Gervais Williams and Martin Turner have pared their exposure to wealth manager and stockbroker Walker Crips (WCW) as its shares dip to a five-year low.

Williams cut his holding in the business from just over 5% of the shares to 4.9% worth £775,150 at a share price of 37p, down from a recent high of 48p.

The shares are held in his £113 million Miton UK MicroCap Trust.

Walker Crips is one of a number of small-cap brokers to have been squeezed in recent years as regulatory change and risk aversion kept the market for new share issuance muted.

Shares in the business have traded in a fairly narrow band between a high of 53p and a low of 38p, but fell to a low of 37p for the first time since September 2015 this month.

The company reported a pre-tax profit of £500,000 in the six months to end September 2017, unchanged on the same period of the year before.

Key stats
Market capitalisation£998m
No. of shares out78m
No. of shares floating55m
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 small cap supremo Harry Nimmo has upped his stake in direct-marketing utility provider Telecom Plus (TEP) as the shares rally from the lows hit last year after U-turning on a buyback.

Nimmo increased his holding in the business from 11% of the shares to just over 12% worth £112 million at a share price of £12.46, up from a low of £10.69 in September 2017.

The shares are held in his £1.4 billion Standard Life UK Smaller Companies fund and his £519 million UK Smaller Companies trust.

Telecom Plus markets itself under the name Utility Warehouse. The company is unusual in its sector, offering a discounting scheme to customers who sign up others.

Its shares have slid from a 2014 high of £18.94 as energy prices have cooled and politicians have begun to threaten tighter controls on opaque tariffs. Investors sold it off a further 13% in June last year after it scaled back the size of a planned return of cash, citing regulatory fears.

Key stats
Market capitalisation£275m
No. of shares out183m
No. of shares floating181m
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 blue-chip growth manager Alex Savvides has upped his stake in own-brand household staples manufacturer McBride (MCB) as a recent nosedive in its shares steepens.

Savvides increased his stake in the business from 4.9% of shares to 5.1% or 9.3 million worth just over £14 million at a share price of 150p, down 34% in the year so far from a high of 232p.

The shares are held in his £969 million JOHCM UK Dynamic fund.

McBride produces a range of cleaning and bathroom products marketed under retailers’ own names.

A three-year bull run in the business has abruptly reversed this year as it reported a 3.4% slide in like-for-like sales over the second half of 2017, as it lost a number of significant contracts.

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  • Ab Dynamics PLC (ABDP.L)
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  • Walker Crips Group PLC (WCW.L)
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  • Telecom Plus PLC (TEP.L)
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  • McBride PLC (MCB.L)
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