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Four shares the pros are trading

Our regular round-up of trades by professional investors, featuring Faroe Petroleum, CVS Group, Eco Animal Health and K3 Capital Group.

by Selin Bucak, David Campbell on Jul 17, 2017 at 05:01

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Key stats
Market capitalisation£779m
No. of shares out64m
No. of shares floating62m
No. of common shareholdersnot stated
No. of employees4130
Trading volume (10 day avg.)m
Turnover£218m
Profit before tax£7m
Earnings per share11.45p
Cashflow per share42.36p
Cash per share11.17p

CVS Group

Citywire AAA-rated small-cap veteran Harry Nimmo has banked some profit on veterinary business CVS Group (CVSG), after its shares fell back from a record high early last month.

Nimmo trimmed his position from 12.6% to 11.2% of the share capital At a share price of £12.10, the stake is worth £773 million.

The shares are predominantly held in his Standard Life Investment UK Smaller Companies, the largest single holder of the stock, with a sizeable minority stake held by colleague Wesley McCoy’s SLI UK Equity Unconstrained fund.

CVS, which has rapidly consolidated vet groups in recent years in addition to launching a range of own-brand products, is the largest sector employer in the UK, with 822 vets among 3,400 staff.

While off from a recent peak, shares in the business have still appreciated near 10-fold over the last five years.

Key stats
Market capitalisation£414m
No. of shares out65m
No. of shares floating51m
No. of common shareholdersnot stated
No. of employees201
Trading volume (10 day avg.)m
Turnover£61m
Profit before tax£11m
Earnings per share16.17p
Cashflow per share23.49p
Cash per share31.49p

Eco Animal Health

Citywire AA-rated small cap selector Giles Hargreave has upped his stake in livestock pharmaceutical developer Eco Animal Health (EAH), after its shares extended a substantial climb.

Hargreave increased his investment in the business from 4.9% to just over 5%. At a share price of 632.5p, the stake is worth £20.24 million. A year ago, its share price was 435p.

The position is largely held in portfolios Hargreave runs for Marlborough Fund Managers, with the remainder held by private clients of his broker and asset manager Hargreave Hale.

Eco was sharply revalued higher following a May statement saying it would ‘significantly exceed’ profit expectations. Last month it reported a 75% gain in pre-tax profit to £13.5 million as sterling depreciation drove a big gain on earnings, ‘virtually all’ of which are made in overseas currencies.

Peel Hunt reiterated its buy rating following the numbers, upping its price target from 650p to 725p.

Key stats
Market capitalisation£47m
No. of shares out42m
No. of shares floating18m
No. of common shareholdersnot stated
No. of employees87
Trading volume (10 day avg.)m
Turnover£9m
Profit before tax£2m
Earnings per share5.85p
Cashflow per share5.90p
Cash per share3.63p

K3 Capital Group,

Gervais Williams has upped his stake in corporate finance company K3 Capital Group (K3C), which has seen its share price rise 3.64% since 12 April.

Williams and co-manager and Martin Turner have increased their stake in the business from 12.69% up to 13.07%. At a share price of 114p, the holding is worth £6.3 million.

The shares are held in their small-cap dividend mandate the Diverse Income trust, as well as the Investment Company and the CF Miton UK Multi Cap Income fund.

K3 Capital, which listed on the AIM back in April, said in a trading statement last month that it experienced ‘strong performance’ over the year and that revenue is in line with expectations.

Chief executive John Rigby added that the company has a ‘significant pipeline of opportunities’ and said: ‘Growth in the business is certainly the key strategy. Our average completion fees across the business have grown significantly year on year, and continue to do so.’

Analysts at FinnCap have recently issued a corporate rating and put a price target of 150p on the stock.

Key stats
Market capitalisation£287m
No. of shares out367m
No. of shares floating286m
No. of common shareholdersnot stated
No. of employeesnot stated
Trading volume (10 day avg.)1m
Turnover£95m
Profit before tax£-33m
Earnings per share-10.50p
Cashflow per share-3.02p
Cash per share26.55p

Faroe Petroleum

Citywire AA-rated value specialist Alex Wright has ramped up his stake in North Sea exploration specialist Faroe Petroleum (FPM), after its shares limped to a 2017 low on renewed oil price weakness.

Wright increased his holding in the business to 5.1%. The position is worth £14.6 million at a share price of 77.75p, close to 30% below a three-year high of 111p in February.

The shares are predominantly held in his £3.3 billion Fidelity Special Situations fund, with a much smaller holding in his £420 million UK Smaller Companies fund.

A broad move lower in oil prices in the last six months has held the price of crude below $50 a barrel since early June.

That has counteracted some outwardly cheering news for Faroe, such as a recent greenlight granted to a major Norwegian development field in which it has a minority interest.

Analysts tracked by Reuters offer a median price target of 117p for the stock.

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Look up the shares

  • K3 Capital Group PLC (K3C.L)
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  • ECO Animal Health Group PLC (EAH.L)
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  • CVS Group PLC (CVSG.L)
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