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4 shares the pros are buying and selling

A roundup of trades by professional investors, featuring Ebiquity, Renew, Chamberlin and Liontrust.

by Michelle McGagh on Jan 11, 2016 at 05:00

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Key stats
Market capitalisation£6m
No. of shares out8m
No. of shares floating6m
No. of common shareholdersnot stated
No. of employees399
Trading volume (10 day avg.)m
Turnover£41m
Profit before tax£m
Earnings per share0.20p
Cashflow per share16.02p
Cash per share-9,999,999.00p

*Correct as at 8 Jan 2016

Chelverton pair seize on Chamberlin falls

Citywire AAA-rated small cap veterans David Taylor and David Horner have bought heavily into a recent sharp fall for specialist casting and engineering business Chamberlin (CMH).

The managers increased their holding to 5.2% of the company worth £295,000 at a share price of 71p, down 29% over the last year and 57% over three years.

After steadily grinding lower over much of 2015, Chamberlin slumped sharply at the end of November as it reported a 75% drop in profit over the first half, down from £400,000 to £100,000. The company took a hit on a strengthening pound and lower demand from the commodity sector.

The shares are held in the managers Chelverton Small Companies Dividend trust, which has returned 85% over the last three years versus a benchmark return of 36.6%.

House broker Panmure Gordon reaffirmed its ‘buy’ recommendation following the announcement, on a price target of 95p. FinnCapp rates it a hold on 70p.

Key stats
Market capitalisation£103m
No. of shares out73m
No. of shares floating67m
No. of common shareholdersnot stated
No. of employees850
Trading volume (10 day avg.)m
Turnover£74m
Profit before tax£4m
Earnings per share4.65p
Cashflow per share10.12p
Cash per share12.11p

*Correct as at 8 Jan 2016

Godber and Hamilton take profits on Ebiquity…

Citywire AAA-rated deep value experts George Godber and Georgina Hamilton have booked some profits on the steady appreciation of marketing consultancy Ebiquity (EBQ).

The managers reduced their exposure to 3.9% of the business worth £4.2 million at a price of 141p, up 57% over three years and 19% over 12 months.

The shares are held in both their £618 million Miton Value Opportunities fund and £77.5 million Miton Undervalued Assets fund.

Ebiquity booked the majority of its recent gains in May 2015 following a market update reporting ‘high single-digit revenue growth… the highest in the company’s recent history,’ while its most popular media and marketing optimisation services reported double-digit sales growth.

In a cyclical media business the current price, at a multiple of 20.1 times cashflow versus a peer median of 11.2 times, and 16.5 times earnings, might be considered peaky, however. House broker Numis rates the company a ‘buy’, on a price target of 162p.

Key stats
Market capitalisation£124m
No. of shares out45m
No. of shares floating36m
No. of common shareholdersnot stated
No. of employees66
Trading volume (10 day avg.)m
Turnover£37m
Profit before tax£6m
Earnings per share13.58p
Cashflow per share19.14p
Cash per share36.58p

*Correct as at 8 Jan 2016

Hedge fund veteran captures more Liontrust

Activist hedge fund veteran Reade Griffith has upped his stake in investment boutique Liontrust (LIO) as its shares drop into the lower half of their recent range.

Griffith, manager of the Polygon Global Partners fund, increased his holding in the business to 11.07% worth £13.6 million at a share price of 270p.

Liontrust has traded down 27% from a high of 376p in July last year and a more recent November range of close to 300p.

Speaking to Citywire last year, Liontrust chief executive John Ions described Reade as a ‘supportive’ investor.

‘He saw value in us and feels the dynamics behind the industry are very good. He sees us as one of the better growth opportunities out there.’

Polygon’s investment portfolio is dominated by financial businesses, which make up 84% of fund assets. Broker Panmure Gordon reiterated its ‘buy’ rating on Liontrust last month, on a price target of 400p.

Key stats
Market capitalisation£242m
No. of shares out62m
No. of shares floating57m
No. of common shareholdersnot stated
No. of employees3068
Trading volume (10 day avg.)m
Turnover£520m
Profit before tax£13m
Earnings per share21.06p
Cashflow per share38.65p
Cash per share17.22p

*Correct as at 8 Jan 2016

…and trim Renew stake

Godber and Hamilton have also trimmed their holding in Renew Holdings (RNWH) to below 5% after the engineering services company hit a new 52-week high when it reached a share price of 405p.

The pair have cut their holding to just under 5% of the business worth £12 million at a share price of 391p.

The majority of the shares are held in the Miton UK Value Opportunities fund, with the remainder held in the Miton Undervalued Assets fund co-managed by the duo.

Renew Holdings provides engineering services for UK infrastructure, environmental and energy markets. Over one year, the shares are up 37.9%.

In its latest results the firm reported revenues of £520 million and an adjusted operating profit of £20.4 million for the year ending 30 September 2015. It also announced a dividend of 7p per share.

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  • Ebiquity PLC (EBQ.L)
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  • Renew Holdings PLC (RNWH.L)
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  • Chamberlin PLC (CMH.L)
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  • Liontrust Asset Management PLC (LIO.L)
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