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5 shares the pros are buying and selling

A roundup of trades by professional investors, including PayPoint, U and I, De La Rue, Paysafe and Produce Investments.

by David Campbell, Selin Bucak on Feb 22, 2016 at 05:00

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Key stats
Market capitalisation£410m
No. of shares out101m
No. of shares floating101m
No. of common shareholdersnot stated
No. of employees3950
Trading volume (10 day avg.)m
Turnover£472m
Profit before tax£34m
Earnings per share33.46p
Cashflow per share58.44p
Cash per share30.46p

*Correct as at 19 Feb 2016

Martin cuts De La Rue stake

Citywire AA-rated rising mid-cap star Mark Martin has pared some of his exposure to one of his highest conviction holdings, banknote printer De La Rue (DLAR), as its shares have continued to slide.

Martin reduced his stake to just under 13% of the business worth £53 million at a share price of 405p, down 31.5% over the last 12 months versus a FTSE All-Share loss of 12.3%.

The company was the second largest position in his £724 million Neptune UK Mid Cap fund at the end of January.

Broker outlooks on the business have steadily strengthened over the last 12 months as it has got cheaper, with Numis and Investec both upgrading it in 2016, to a shared price target of 530p.

One of the few outright winners through the credit crunch, the business benefited from unconventional monetary policy. It never recovered that momentum after the US Federal Reserve began to ease back on QE in 2012 however, and is down from a peak above £10.

Key stats
Market capitalisation£501m
No. of shares out68m
No. of shares floating65m
No. of common shareholdersnot stated
No. of employees731
Trading volume (10 day avg.)m
Turnover£219m
Profit before tax£39m
Earnings per share57.36p
Cashflow per share66.92p
Cash per share58.99p

*Correct as at 19 Feb 2016

Woodford tops up on Paypoint

Star manager Neil Woodford has increased his stake in payment processor PayPoint (PAYP) following a 20% slide in its shares since the turn of the year.

The Woodford Equity Income manager has increased his stake to 11% of the business.

The FTSE 250 company, which operates bill payment terminals in the UK and Romania, announced a 1.8% increase in underlying revenue to £35 million, however, total revenues dropped to £58.1 million for the third quarter ending 31 December 2015.

PayPoint also announced a 22.7% growth in retail services, and mobile and online saw growth of 9.6%. This was offset by a decline in its top-ups payment division of 13.7%.

The chief executive, Dominic Taylor, attributed the decline to unseasonably warm weather and its impact on energy consumption.

The firm’s joint venture Collect+ parcel service is also running at a small loss, which Taylor said the group was aiming to resolve.

Key stats
Market capitalisation£1,942m
No. of shares out480m
No. of shares floating436m
No. of common shareholdersnot stated
No. of employees712
Trading volume (10 day avg.)4m
Turnover255m USD
Profit before tax40m USD
Earnings per share0.13 USD
Cashflow per share0.18 USD
Cash per share0.35 USD

*Correct as at 19 Feb 2016

Morgan pays up for Paysafe

Citywire AA-rated small cap stock picker Elaine Morgan has upped her stake in online payments business Paysafe Group (PAYS).

Morgan increased her holding to 4% of the business from 18.95 million to 19.23 million or 4.01% worth £78 million at a share price of 405p.

The shares are managed by her Kames UK Smaller Companies fund, with smaller amounts in sister funds Kames Ethical Equity and Kames UK Equity.

Analysts have consistently upgraded Paysafe (formerly known as Optimal Payments) this year, with Deutsche Bank lifting it from 410p to 500p, Citigroup from 400p to 490p and Berenberg from 431p to 444p.

In a trading update at the beginning of January, the company reported 2015 revenue and earnings were likely to come in ahead of market expectations. Having graduated to the main exchange in December it is due for inclusion in the FTSE 250 at its reweighting in March.

Key stats
Market capitalisation£34m
No. of shares out27m
No. of shares floating15m
No. of common shareholdersnot stated
No. of employees1178
Trading volume (10 day avg.)m
Turnover£178m
Profit before tax£5m
Earnings per share19.77p
Cashflow per share37.23p
Cash per share10.32p

*Correct as at 19 Feb 2016

Mackenzie picks more Produce

Citywire AAA-rated Judith Mackenzie has increased her stake in Produce Investments (PIL) to take it past 5%. Mackenzie has upped her holding to 5% of the company worth £1.7 million at a share price of 125p.

The shares are mainly held in the PFS Downing UK Micro-cap growth fund.

Produce Investments is the parent company of UK-based potato business Greenvale AP. The group and its subsidiaries grow, source, pack and market potatoes, daffodil bulbs and flowers.

In its full-year results for the year ended 27 June 2015, the company revealed that operating profits fell to £8 million compared to £11.1 million in 2014, which it attributed to challenging market conditions.

However, chief executive Angus Armstrong said that the company’s recent acquisitions, as well as the rationalisation of its fresh packing sites, placed it in a position to handle external pressures. The board also announced an increase in the full year dividend to 7.165p.

Key stats
Market capitalisation£252m
No. of shares out125m
No. of shares floating116m
No. of common shareholdersnot stated
No. of employees112
Trading volume (10 day avg.)1m
Turnover£204m
Profit before tax£33m
Earnings per share26.77p
Cashflow per share28.26p
Cash per share49.34p

*Correct as at 19 Feb 2016

Godber and Hamilton seize on U and I slump

Citywire AAA-rated deep value veterans George Godber and Georgina Hamilton have sharply increased their exposure to property developer U and I Group (UAI) following a 30% drop in its share price.

The managers upped their investment to 3.2% of the business worth £8 million at a share price of 200p, down sharply from a peak of 292p in June.

The shares are held in their £725 million Miton UK Value Opportunities fund, the second best performer in its UK All Companies sector over the last year.

U and I Group – known as Development Securities before its takeover of Cathedral Group last year – is an urban regeneration specialist with a focus on London, Belfast and Manchester. It currently trades at a dividend yield of 4.2% and a price-to-book of 0.7, versus a peer group average of 0.9.

Broker Peel Hunt upgraded the company to a ‘buy’ in January on a price target of 290p.

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  • PayPoint plc (PAYP.L)
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  • U and I Group PLC (UAI.L)
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  • De La Rue PLC (DLAR.L)
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  • Paysafe Group PLC (PAYS.L)
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  • Produce Investments PLC (PIL.L)
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