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5 shares the pros are buying and selling

A roundup of trades by professional investors, featuring Telford Homes, Ultra Electronics, DX Group, Mcbride and Xaar.

by David Campbell, Selin Bucak on Mar 21, 2016 at 05:00

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Key stats
Market capitalisation£258m
No. of shares out75m
No. of shares floating60m
No. of common shareholdersnot stated
No. of employees212
Trading volume (10 day avg.)m
Turnover£140m
Profit before tax£20m
Earnings per share32.60p
Cashflow per share33.60p
Cash per share65.82p

*Correct as at 18 Mar 2016

Luthman and Bailey top up Telford stake

Citywire AA-rated income seekers Jan Luthman and Stephen Bailey have upped their stake in East London property developer Telford Homes (TELF) as top-end central residential markets begin to cool.

The managers increased their investment to just over 5% of the company worth £13.1 million at a share price of 348p, down 30% from a 2015 high of 492p.

The shares are held in their £523 million Liontrust Macro Equity Income fund, the largest shareholder in the company.

Telford Homes primarily focuses on mixed developments in the east of the capital.

Estate agent Foxtons noted this month that Walthamstow would soon be a bigger driver of its profits than Pimlico, as lower levels of overseas buyers, booming construction of luxury flats south of the river and middle class purchasers outside the centre help to erode a huge central London premium.

Analysts view on Telford are mixed, with two ‘holds’ to one ‘buy’ on a median price target of 450p.

Key stats
Market capitalisation£44m
No. of shares out201m
No. of shares floating187m
No. of common shareholdersnot stated
No. of employees3196
Trading volume (10 day avg.)6m
Turnover£298m
Profit before tax£20m
Earnings per share9.92p
Cashflow per share14.11p
Cash per share3.49p

*Correct as at 18 Mar 2016

Wright and Winton dabble in DX

Citywire AAA-rated value veterans Alex Wright and Jonathan Winton have ramped up their stake in troubled delivery service DX Group (DXDX), following a year in which a profit warning has hammered the shares,The managers increased their holding to nearly 8% of the group worth £3.5 million at a price of 22p, down from a year high of 92p.

The stake is held in their £368 million Fidelity UK Smaller Companies fund. Taking the other side of the trade recently have been Giles Hargreave of Hargreave Hale and Simon Moon of Unicorn, both AA-rated and who have both sold down.

DX slumped last November when it reported that difficult trading and higher costs would substantially lower profits. This was borne out by results last month showing adjusted profit down 87%, despite revenue being just 4% lower.

Analysts unanimously rate it a ‘hold’, on a median target price of 24p.

Key stats
Market capitalisation£305m
No. of shares out182m
No. of shares floating180m
No. of common shareholdersnot stated
No. of employees4747
Trading volume (10 day avg.)m
Turnover£704m
Profit before tax£-1m
Earnings per share-0.38p
Cashflow per share10.91p
Cash per share12.79p

*Correct as at 18 Mar 2016

Clark cleans up on McBride

Citywire AA-rated manager Michael Clark has taken profits from cleaning and toiletry product manufacturer McBride (MCB).

The Fidelity MoneyBuilder Dividend fund manager has reduced his stake to less than 5% of the company.

Shares of McBride are up 67% over 12 months, and are trading at 167.9p.

McBride is a UK-based company that supplies private household and personal care products.

The previously troubled company announced bumper results for the six months to 31 December. Profit before tax was up 78.1% to £13 million, following a major restructuring project announced in June 2014.

The struggling UK business’ turnaround plan is believed to be on track as analysts at Liberum Capital set their stock rating at ‘buy’ with a target price of 215p.

Key stats
Market capitalisation£1,266m
No. of shares out70m
No. of shares floating70m
No. of common shareholdersnot stated
No. of employees4787
Trading volume (10 day avg.)m
Turnover£726m
Profit before tax£25m
Earnings per share35.63p
Cashflow per share100.61p
Cash per share64.70p

*Correct as at 18 Mar 2016

Wood ups Ultra holding

Citywire AA-rated equity veteran John Wood has upped his stake in defence systems business Ultra Electronics (ULE) as its shares retreat from a record high hit at the end of 2015.

Woods increased his holding to over 5% of the company worth £63 million at a share price of £18.02, down 11% from an all-time peak of £20.26 reached in December.

The shares are held in his £1.6 billion JOHCM UK Opportunities fund. Wood is possibly best remembered as one of a very few UK fund managers to anticipate and position for the credit crunch.

Ultra, which had largely traded sideways for the previous two years, was the beneficiary of a relief rally last year as investors anticipated some let-up from an extended period of military belt-tightening.

Chief executive Rakesh Sharma last month noted the group still faced ‘difficult market conditions’ but said the UK defence review and a two-year US budget settlement offered some clarity. Analysts remain sceptical, with a median price target of £19.75.

Key stats
Market capitalisation£353m
No. of shares out78m
No. of shares floating75m
No. of common shareholdersnot stated
No. of employees785
Trading volume (10 day avg.)m
Turnover£93m
Profit before tax£13m
Earnings per share16.11p
Cashflow per share30.22p
Cash per share91.17p

*Correct as at 18 Mar 2016

Xaar excites Thomas

Citywire AA-rated growth investment veteran Nigel Thomas has lifted his investment in market-leading industrial printing specialist Xaar (XAR) following a 17% drop in its shares over the last six months.

Thomas increased his investment to over 13% of the business worth £45.8 million at a share price of 454p, down from a recent high of 629p in October.

The shares are overwhelmingly held in his £4 billion AXA Framlington UK Select Opportunities fund with comparatively tiny numbers held in AAA-rated colleague Henry Lowson’s UK Smaller Companies and Richard Marwood’s Ethical Distribution funds.

Xaar spiked spectacularly to above £11 in 2013/14 on booming Chinese demand for its ceramic tile printing, which at the time contributed around 60% of company sales, before returning equally dramatically to earth on the emerging market slowdown.

It has since successfully re-orientated its business toward digital and 3D-printing applications. Analysts remain broadly supportive with recent upgrades putting it on a median target of 550p.

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Look up the shares

  • Telford Homes PLC (TELF.L)
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  • Ultra Electronics Holdings PLC (ULE.L)
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  • DX (Group) PLC (DXDX.L)
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  • McBride PLC (MCB.L)
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  • Xaar PLC (XAR.L)
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