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5 shares the pros are buying and selling

A round-up of shares fund managers like Neil Woodford and Gervais Williams have been trading.

by David Campbell, Selin Bucak on Mar 07, 2016 at 05:01

Key stats
Market capitalisation£11m
No. of shares out142m
No. of shares floating132m
No. of common shareholdersnot stated
No. of employees67
Trading volume (10 day avg.)2m
Turnover£m
Profit before tax£-5m
Earnings per share-4.78p
Cashflow per share-4.68p
Cash per share7.07p

*Correct as at 4 Mar 2016

Woodford adds to Sphere Medical

Star manager Neil Woodford has upped his stake in medical device maker Sphere Medical to over 25% following an 8% increase in its share price on 2 March.

The Citywire AAA-rated manager’s eponymous investment firm, Woodford Investment Management, added to its holding, bringing it up from 35.1 million shares to 36.65 million, taking the overall stake up to 25.9% which is worth £2.7 million. Average price paid for the additional shares was 7.42p. The shares of Sphere Medical are down 62.88% over 12 months.

Sphere Medical is based in the UK and specialises in developing medical monitoring and diagnostic equipment. It recently opened a new production facility in Wales, anticipating an increase in demand following the expected launch of its blood monitoring system, Proxima 4.

Back in April 2015, the company told investors that Woodford’s Patient Capital Trust entered into a legally binding commitment to subscribe for 23.1 million shares, which gave the closed-end fund a 16.3% stake.

Analysts at Panmure Gordon have set their recommendation at buy, with a potential upside of 161.5% for the firm which is listed on the Alternative Investment Market (AIM).

Key stats
Market capitalisation£4,785m
No. of shares out504m
No. of shares floating497m
No. of common shareholdersnot stated
No. of employees32368
Trading volume (10 day avg.)1m
Turnover£3,997m
Profit before tax£260m
Earnings per share53.18p
Cashflow per share89.61p
Cash per share28.46p

*Correct as at 4 Mar 2016

Barnett buys more battered Babcock

Citywire AAA-rated equity supremo Mark Barnett has upped his stake in infrastructure and defence engineering specialist Babcock International following a 20% slide in its shares since June last year.

Barnett upped his stake in the business from 49.4 million shares to 50.4 million or 10% worth £461 million at a share price of 915p, down sharply from a 2014 high of £12.97.

The shares are primarily held in his Perpetual Income & Growth Investment trust. Barnett has stepped up to fill the sizable shoes of AAA-rated former co-manager Neil Woodford, the UK’s most widely-followed professional investor, following the latter’s exit from Invesco Perpetual in 2014.

The outlook for Babcock, which generates around 40% of its revenue from Ministry of Defence contracts, has looked less certain in recent years as defence spending has been cut. The company has successfully picked up work from increased government outsourcing of services, however.

Citigroup last week cut its outlook on the company from £10 to 850p, rated sell.

Key stats
Market capitalisation£374m
No. of shares out279m
No. of shares floating277m
No. of common shareholdersnot stated
No. of employees2798
Trading volume (10 day avg.)1m
Turnover£377m
Profit before tax£-5m
Earnings per share-2.40p
Cashflow per share14.23p
Cash per share3.40p

*Correct as at 4 Mar 2016

Wright catches Chemring on a low

AAA-rated turn-around specialist Alex Wright has taken a chunky stake in arms and aerospace systems manufacturer Chemring Group as the business struggles to recover from a profit warning.

Wright, who previously held no reportable position in the business, took 10.1 million shares or 5.22% worth £12.4 million at a share price of 123p, down more than 38.5% over the last year.

The shares are held in his Fidelity Special Situations fund, one of the largest and most successful funds of the 1990s beneath his predecessor Anthony Bolton. Following Bolton’s departure the fund was split into UK and global portfolios, with Wright managing the domestic component.

Chemring, which has dropped 78% over five years, further disappointed investors in October last year with a profit warning. The firm was then forced to axe its final dividend and launch an £80 million rights issue last month, after reporting a pre-tax loss of £9.1 million.

Of nine analysts tracking the stock, only Investec is braving a buy, on a price target of 210p.

Key stats
Market capitalisation£19m
No. of shares out83m
No. of shares floating55m
No. of common shareholdersnot stated
No. of employees121
Trading volume (10 day avg.)m
Turnover£17m
Profit before tax£m
Earnings per share0.35p
Cashflow per share1.57p
Cash per share0.12p

*Correct as at 4 Mar 2016

Williams backs Coral

Citywire AAA-rated small-cap income investor Gervais Williams has put the best part of a million pounds into a placement by injection moulded plastics manufacturer Coral to fund an acquisition.

Williams upped his stake in the business from 14.4% of shares to 19.99% or 16.51 million worth £3.63 million at a share price of 22p, up 113% over the last 12 months

Coral Group announced the £3.6 million purchase of spray bottle maker Global One-Pak, part funded via the placing of £2.55 million in new equity, at a price of 20p per share.

Miton, where Williams serves as managing director in addition to fund manager, is the largest investor in Coral, with the majority of the shares held in his CF Miton Multi-Cap Income fund.

In the six months to November Coral reported after-tax profits up 135% to £684,000, as it cut costs and diversified away from its traditional CD and DVD case product ranges. Broker Daniel Stewart rates the company a buy on a price target of 25p.

Key stats
Market capitalisation£368m
No. of shares out100m
No. of shares floating53m
No. of common shareholdersnot stated
No. of employees2547
Trading volume (10 day avg.)m
Turnover£92m
Profit before tax£11m
Earnings per share11.32p
Cashflow per share15.47p
Cash per share6.10p

*Correct as at 4 Mar 2016

Nickols nicks some profits at Patisserie

Citywire AAA-rated small and mid-cap specialist Dan Nickols has banked some profit on his stake in cafe chain Patisserie Valerie owner Patisserie Holdings as its share slip from a record high.

Nickols trimmed his stake in the business from 7.78 million shares to 6.97 million or 6.98% worth £26 million at a share price of 374p, down from a high of 450p at the beginning of the year.

The shares are primarily held by his Old Mutual UK Smaller Companies fund with a smaller slice held in AAA-rated colleague Luke Kerr’s Old Mutual UK Dynamic Equity fund.

Despite the recent dip, shares in Patisserie Holdings – which trades under the ticker CAKEP – remain 90% up on where they entered trading in May 2014. In results for the year to end September the business reported profit up 40% to £14 million on revenue up 20%.

Investec rates the company a buy, on a price target of 425p.

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Look up the shares

  • Sphere Medical Holding PLC (SPHR.L)
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  • Babcock International Group PLC (BAB.L)
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  • Chemring Group PLC (CHG.L)
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  • Coral Products PLC (CRU.L)
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  • Patisserie Holdings PLC (CAKEP.L)
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