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5 shares the pros are buying and selling

A roundup of trades by professional investors, including star manager Neil Woodford’s latest acquisition.

by Michelle McGagh on Mar 29, 2016 at 05:00

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Key stats
Market capitalisation£74m
No. of shares out62m
No. of shares floating42m
No. of common shareholdersnot stated
No. of employees43
Trading volume (10 day avg.)1m
Turnover£6m
Profit before tax£-1m
Earnings per share-1.28p
Cashflow per share-1.26p
Cash per share3.78p

*Correct as at 24 Mar 2016

Blue Prism lures in Hargreave

Citywire AA-rated small cap selector Giles Hargreave has taken a significant position in the initial public offering of robotic services and automation business Blue Prism (PRSMB).

Hargreave took a 6% position at an issue price of 78p. That holding is now worth £4.3 million after the shares jumped to 117.7p following their listing.

The majority of the shares are held in funds run by his broker and asset manager Hargreave Hale for Marlborough Fund Managers, with the remainder held by his discretionary clients. Schroders is the other major investor to pop up on its share register so far.

Blue Prism, which debuted on the Alternative Investment Market this month, offers systems-based robotics capable of automating many back-office and administrative functions which remain typically performed by human staff.

The company raised £21 million in order to expand its network of distribution partners, which licence its technology for use by sector specialists.

Key stats
Market capitalisation£51m
No. of shares out73m
No. of shares floating54m
No. of common shareholdersnot stated
No. of employees99
Trading volume (10 day avg.)m
Turnover£17m
Profit before tax£3m
Earnings per share3.80p
Cashflow per share5.83p
Cash per share8.09p

*Correct as at 24 Mar 2016

Cross and Fosh take profits on Concurrent

Citywire AA-rated value veterans Anthony Cross and Julian Fosh have banked some profit on a stake in embedded computing specialist Concurrent Technologies (CNCT), following a dramatic upward rerating.

The two managers trimmed their holding to around 18% of the business worth £9 million at a price of 68.2p, up 87% over the last 12 months.

The shares are divided near-equally between their £1.6 billion Liontrust Special Situations and £420 million Liontrust UK Smaller Companies funds.

Concurrent produces single-board computers used by a range of blue-chip clients in telecoms, aerospace and defence industries. High levels of demand in the former drove performance last year, with profit rising 59% to £2.7 million and earnings per share 66% higher.

‘Sales in the first quarter of 2016 have been excellent and our current order book indicates a strong first half year performance,’ said company chair Michael Collins last week.

WH Ireland lifted its target price on the stock to 200p at the end of last year, rated ‘buy’.

Key stats
Market capitalisation£16m
No. of shares out128m
No. of shares floating61m
No. of common shareholdersnot stated
No. of employees156
Trading volume (10 day avg.)m
Turnover£49m
Profit before tax£1m
Earnings per share0.68p
Cashflow per share1.11p
Cash per share6.57p

*Correct as at 24 Mar 2016

Newton sees bright future for Lighthouse

Small cap hedge fund star David Newton has continued to add to his position in financial adviser and insurance broker the Lighthouse Group (LGHT) as the business extends a sharp year-long rally.

Newton, who has been incrementally adding to his stake as a still-thin share register allows, lifted his holding to 8% of the business worth £1.3 million at a share price of 12.5p, up 96% over the last 12 months. The shares are held in his Helium Rising Stars fund.

Broker finnCap last month lifted its target price on the company from 12p to 13p. The prices commanded by retail financial advisers have climbed in recent years as regulation has removed commission income and forced them to focus on higher-quality recurring revenue.

Lighthouse has also attracted bid interest from AFH Financial Group, rebuffing its rival’s takeover bid.Price inflation among investment businesses was particularly sharp last according to sector consultant Scorpio, with sales prices as a percentage of assets up 50% to 2.1% year-on-year.

More capital-intensive regulation has promoted consolidation in what has historically been a small-scale and highly dispersed industry.

Key stats
Market capitalisation£18m
No. of shares out142m
No. of shares floating132m
No. of common shareholdersnot stated
No. of employees67
Trading volume (10 day avg.)1m
Turnover£m
Profit before tax£-5m
Earnings per share-4.78p
Cashflow per share-4.68p
Cash per share7.07p

*Correct as at 24 Mar 2016

Woodford snaps up more Sphere shares

Citywire AAA-rated fund manager Neil Woodford has increased his holding in medical device maker Sphere Medical (SPHR).

Woodford Investment Management has upped his stake to 28% of the business, worth £5.2 million at a share price of 12.9p.

Sphere Medical shares have endured a choppy ride, and are down 32% over 12 months despite rallying from a low of 6p in February.

The AIM-listed diagnostics firm Sphere Medical was Woodford’s first investment in his Woodford Patient Capital investment trust. The company, based in the UK, specialises in developing medical monitoring and diagnostic equipment. Its products include Proxima and Pelorus.

In its preliminary results for the year ended 31 December 2015, the company reported revenues of £15,000 in line with its ‘go-to-market’ strategy. Meanwhile, loss after tax was £5.5 million.

Key stats
Market capitalisation£1,258m
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 24 Mar 2016

Morgan buys on Ultra Electronics dip

Citywire AA-rated small-cap selector Elaine Morgan has upped her stake in defence systems business Ultra Electronics (ULE) following a sharp derating in the stock from an all-time high seen last December.

Morgan increased her holding in the business from 2.06 million shares to 2.16 million or 3.07% worth £38.7 million at a share price of £17.93, down more than 11% from a high of £20.26 last year.

The shares are held in her £296 million Kames UK Smaller Companies fund. Morgan is the second equity pro to believe they have spotted value in the comparatively thinly-traded business recently, following JOHCM’s Citywire AA-rated John Wood’s decision to up his investment.

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

The company currently trades at a price 13.5 times 2015 earnings, versus a peer average of 15.3.

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  • Sphere Medical Holding PLC (SPHR.L)
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  • Blue Prism Group PLC (PRSMB.L)
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  • Concurrent Technologies PLC (CNCT.L)
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  • Ultra Electronics Holdings PLC (ULE.L)
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  • Lighthouse Group PLC (LGHT.L)
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