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Six shares the pros are buying and selling

We reveal what some of the top fund managers and other leading investors are doing in the shares of Air Partner (AIP.L), Lok 'n Store (LOK.L), Brewin Dolphin (BRW.L), Interquest (ITQ.L), Brooks Macdonald (BRK.L) and Concurrent Technologies (CNCT.L).

by David Campbell on Nov 22, 2012 at 10:33

Key stats
Market capitalisation£31m
No. of shares out10m
No. of shares floating7m
No. of common shareholdersnot stated
No. of employees184
Trading volume (10 day avg.)0m
Turnover£228m
Profit before tax£3m
Earnings per share29.12p
Cashflow per share31.84p
Cash per share159.96p

*Correct as at 13 Nov 2012

Mike Prentis increases Air Partner stake

BlackRock smaller companies fund manager Mike Prentis has upped his stake in aircraft charter and brokerage business Air Partner following a sharp increase in its private jet division.

Prentis increased his holding in the company from 351,219 shares to 452,886. This gives him a 4.4% worth £1.4 million at a share price of 310p. The share price has soared almost 25% since early October.

The shares are held in his £300 million BlackRock Smaller Companies investment trust. Prentis works closely with BlackRock’s head of small companies, Richard Plackett, and runs a similar value-based strategy to his colleague.

Oriel Securities upgraded its view on Air Partners to 'buy' following full-year results last month.

While the company’s overall revenue fell 19% at £227 million, investors responded to an 8% increase in its high-margin private jet division, and increased share of the market.

The company added that it was exploring further emerging market partnerships. Despite a strong recent run-up, the shares remain 5% down on the previous year, offering a dividend yield of 6.25%.

Key stats
Market capitalisation£29m
No. of shares out26m
No. of shares floating16m
No. of common shareholdersnot stated
No. of employees108
Trading volume (10 day avg.)0m
Turnover£13m
Profit before tax£1m
Earnings per share2.99p
Cashflow per share9.98p
Cash per share15.46p

*Correct as at 15 Nov 2012

Gervais Williams increases Lok'n Store holding on soaring dividend

Smaller companies and income fund manager Gervais Williams has opened a position in self-storage business Lok’n Store following a 67% increase in its full-year dividend.

Williams swooped after a recent fall in the share price, buying 783,811 shares to give him a stake of just over 3% in the business. This is worth over £846,000 at a share price of 108p. The shares have fallen 10% over the past month from a recent high of 120p.

The shares are held in his Diverse Income Trust, a smaller companies income fund launched by investment group MAM Funds last year, following his departure from previous employer, Gartmore.

Lok’n Store upped its dividend from 3p per share to 5p at the end of last month, following an 18% increase in full-year revenue, from £10.85 million to £12.77 million. At the current price that provides a dividend yield of 4.2% versus the FTSE All Share yield of just over 4%.

The company operates 22 stores across the south east of England where house prices and activity, key drivers of self-storage revenue, remain relatively robust.

Key stats
Market capitalisation£442m
No. of shares out249m
No. of shares floating222m
No. of common shareholdersnot stated
No. of employees1863
Trading volume (10 day avg.)0m
Turnover£248m
Profit before tax£15m
Earnings per share6.23p
Cashflow per share14.26p
Cash per share35.53p

*Correct as at 15 Nov 2012

Alex Wright buys into Brewin Dolphin

Citywire AAA-rated Alex Wright has opened a chunky position in Brewin Dolphin, adding the private client stockbroker to his fund on its management's drive for change.

Wright took a 1.5% stake in the company or just under 3.74 million shares worth £6.69 million at a share price of 179p.

The shares are held in the £347 million Fidelity Special Values investment trust, which he took over in July.

Wright said he backs Brewins because of its 'sticky' client base and believes there are better opportunities for returns compared with its rivals.

Increasing its margins is key to realising this potential, he added. 'Brewins have realised [this],' he told Citywire, pointing out that while rival Rathbones has fewer assets under management its margins are healthier.

'The Brewin Dolphin business is pretty good. Rathbones is on a higher P/E and that does not make sense to me,' Wright added. Royal Bank of Canada last week increased its price target on the company from 170p to 210p, while rating it 'outperform'.

Key stats
Market capitalisation£17m
No. of shares out33m
No. of shares floating13m
No. of common shareholdersnot stated
No. of employees191
Trading volume (10 day avg.)0m
Turnover£121m
Profit before tax£-1m
Earnings per share-3.39p
Cashflow per share-0.12p
Cash per share0.80p

*Correct as at 22 Nov 2012

David Newton ups Interquest Group holding

Smaller companies hedge fund manager David Newton, manager of the Helium Special Situations fund, has upped his position in IT recruiter Interquest Group as its shares surged. Newton increased his stake in the business from 1.3 million shares to 1.38 million worth around £691,500 at a share price of 49p.

The company has been on a blaze since he initiated a position in September, with the share price rising 31% from 38p. The stock now trades at 10.6 times forecast earnings for next year, just above the average in the employment services sector.

The Helium Special Situations fund typically invests in under-researched smaller companies where it believes the market has fundamentally misunderstood the embedded value in a business.

Interquest invested extensively in its operations over the first half of the year, launching a new international desk and expanding its fee-earners from 169 to 194, and said it expects to begin seeing a return on capital in the second half.

Key stats
Market capitalisation£143m
No. of shares out11m
No. of shares floating8m
No. of common shareholdersnot stated
No. of employees284
Trading volume (10 day avg.)0m
Turnover£53m
Profit before tax£6m
Earnings per share57.08p
Cashflow per share68.61p
Cash per share125.17p

*Correct as at 22 Nov 2012

Anthony Cross and Julian Fosh lift Brooks Macdonald exposure

Citywire AAA-rated UK equity fund managers Anthony Cross and Julian Fosh have ramped up their exposure to asset manager Brooks Macdonald as the business closed in on another acquisition.

Cross and Fosh increased their investment in the business from 1.2 million shares to 1.52 million giving their fund a stake of just over 11% in the company. This is worth nearly £19 million at a share price of £12.25. The stake is held in the duo’s Liontrust Special Situations fund, a favourite of our Citywire Selection analysts, and the Liontrust UK Growth fund.

The purchase follows Brooks Macdonald’s purchase of Channel Island-based private client business Spearpoint for an anticipated total cost of £4 million, which increased its assets under management to £4.5 billion.

Cross told Citywire: ‘The business scores well through the investment process in having high recurring income, above 70%. Strong visible earnings help us take a long-term view of the business.

‘Brooks also scores well in [our] investment process’ second tier of analysis: procedures, formats, culture, customer databases and customer relationship.’

Key stats
Market capitalisation£39m
No. of shares out71m
No. of shares floating55m
No. of common shareholdersnot stated
No. of employees97
Trading volume (10 day avg.)0m
Turnover£14m
Profit before tax£3m
Earnings per share3.60p
Cashflow per share5.26p
Cash per share5.03p

*Correct as at 22 Nov 2012

Giles Hargreave buys more Concurrent Technologies shares

Giles Hargreave, the Citywire AAA-rated veteran smaller companies stockpicker has upped his stake in integrated computer systems manufacturer Concurrent Technologies.

Hargreave increased his stake in the business from just over 3 million shares to 3.6 million giving his fund a stake of slightly more than 5%. This is worth around £2 million at a share price of 54p. The shares have risen almost 20% year-to-date.

The shares are held in funds managed on behalf of private clients at Hargreave’s family stockbroker and investment manager Hargreave Hale.

In results for the first half of 2012 Concurrent reported a dip in profits, from £1.13 million in the previous year to £1.08 million, but increased its earnings per share slightly from 1.45p to 1.46p.

The business has a large pile of cash on hand, with £5 million on its balance sheet, and for a research-intensive smaller company offers a healthy return on equity of 19% according to Reuters data.

This is in part attributable to the company’s programme of share buybacks, which has been active this year. It has also upped its dividend, from 0.6p per share to 0.65p.

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Look up the shares

  • Air Partner PLC (AIP.L)
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  • Lok'n Store Group PLC (LOK.L)
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  • Brewin Dolphin Holdings PLC (BRW.L)
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  • Interquest Group PLC (ITQ.L)
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  • Brooks Macdonald Group PLC (BRK.L)
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  • Concurrent Technologies PLC (CNCT.L)
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