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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring GYG, HomeServe, Future and Greencore.

by Michelle McGagh on Apr 09, 2018 at 05:00

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Key stats
Market capitalisation£m
No. of shares out47m
No. of shares floating28m
No. of common shareholdersnot stated
No. of employees431
Trading volume (10 day avg.)m
Turnover£55m
Profit before tax£7m
Earnings per share0.15p
Cashflow per share5.05p
Cash per share13.31p

Global Yachting Group (GYG)

Who’s trading? Neil Woodford

The trade: Woodford increased his stake in superyacht maintenance company GYG from 18.2% of the shares to 19.3% worth £9.7 million at a share price of 107p.

How have the shares performed? GYG’s shares have been falling from a peak of 149p and over six months the stock is down 28%.

What does the company say? Over the last year, GYG’s business has been hit mainly due to hurricanes that hit the US and Caribbean. This resulted in delays to its contracts, which means the group expects revenue and profit to come in below expectations.

What’s the outlook? The company remains optimistic of prospects for 2018 as contracts have been pushed back but not cancelled. In its trading update it stated: ‘The scheduled work will be undertaken in 2018 with the company expected to go into 2018 with its highest-ever level of in-year order book.’ It has also recently signed a deal to become the fairing and painting contractor for a long term project on ‘the world’s largest explorer vessel’, the REV 182.

Key stats
Market capitalisation£2,416m
No. of shares out330m
No. of shares floating285m
No. of common shareholdersnot stated
No. of employees5242
Trading volume (10 day avg.)1m
Turnover£785m
Profit before tax£154m
Earnings per share23.60p
Cashflow per share39.30p
Cash per share14.87p

HomeServe (HSV)

Who’s trading? Citywire A-rated Gerard Callahan

The trade: Callahan increased his stake in energy repairs business HomeServe from a previously undisclosed amount to 5.2% of the business worth £125 million at a share price of 729p.

How have the shares performed? While over the past six months the company’s share price fell almost 9%, over one year it’s up 30%, with the company on track to deliver growth.

What does the company say? HomeServe said that it expected further growth in this financial year, in its results for the six months to September. While operating profit rose by 12% to £27.5 million on revenue of £366 million, up 16%, the company has been focused on expanding its operations in the US.

What’s the outlook? The company has announced a number of acquisitions over the year, with the purchase of Dominion Products and Services in the US, completed in December, expected to bring forward its North America growth targets by at least 12 months. Back in January Peel Hunt downgraded the stock from ‘add’ to ‘hold’, with a price target of 850p.

Key stats
Market capitalisation£181m
No. of shares outm
No. of shares floatingm
No. of common shareholdersnot stated
No. of employeesnot stated
Trading volume (10 day avg.)m
Turnover£84m
Profit before tax£9m
Earnings per share3.91p
Cashflow per share14.64p
Cash per share22.25p

Future (FUTR)

Who’s trading? Citywire A-rated Mark Slater

The trade: Slater increased his stake in publishing house Future to just over 6% of the business worth £10.5 million at a share price of 384p.

How have the shares performed? Future spent two years in the doldrums on an aggressive restructure but rerated more than 100% higher last year to a peak 430p.

What does the company say? Future has cut costs and refocused since filing a £35 million loss in 2014 and clawed its way back to a profit of £800,000 last year. This has tipped into expansion, last month buying a portfolio of titles including household names such as What Hi-Fi? and FourFourTwo.

What’s the outlook? The company has built a defensive portfolio, heavy on areas such as tech and audio where specialist knowledge is able to command a premium, in addition to building its events business. Numis reiterated its ‘buy’ rating last month on a price target of 465p.

Key stats
Market capitalisation£954m
No. of shares out707m
No. of shares floating701m
No. of common shareholdersnot stated
No. of employees15795
Trading volume (10 day avg.)9m
Turnover£2,320m
Profit before tax£190m
Earnings per share1.86p
Cashflow per share12.63p
Cash per share2.81p

Greencore (GNC)

Who’s trading? Michel Massoud

The trade: Ex-Cheyne Capital hedge fund star Massoud has increased his Melqart Opportunities fund’s exposure to Greencore from 5.3% to 7.2% of the business, held through derivatives worth £65 million at a price of 128p each.

How have the shares performed? Food producer Greencore’s shares fell by 24% on a profit warning earlier this month as the company said its US division was operating at a low capacity, pushing down its forecasted 2018 earnings.

What does the company say? The company has overhauled the management of its US operation and is restructuring in a bid to better match capacity with its commercial pipeline. Greencore also pointed to new business wins that will come into effect later this year and be reflected in improved earnings in the first half of 2019.

What’s the outlook? Massoud upping the stake is his event driven fund is clearly a vote of confidence in Greencore’s ability to address the problems stemming from the integration of Peacock Foods, bought for $748 million in November 2016. However, analysts Numis and Peel Hunt both downgraded the stock this month from ‘buy’ to ‘hold’ with respective price targets of £1.38 and £1.50.

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  • Future PLC (FUTR.L)
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  • GYG PLC (GYG.L)
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  • Greencore Group PLC (GNC.L)
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  • HomeServe PLC (HSV.L)
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