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6 shares the pros are buying and selling

A roundup of trades by professional investors. This time we look at Celtic Football Club, Pace, Severfield, Restore, Epwin and Cranswick.

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Key stats
Market capitalisation£69m
No. of shares out93m
No. of shares floating37m
No. of common shareholdersnot stated
No. of employees455
Trading volume (10 day avg.)0m
Turnover£76m
Profit before tax£10m
Earnings per share7.56p
Cashflow per share12.88p
Cash per share15.74p

*Correct as at 8 Aug 2014

Celtic Football Club

Citywire AA-rated stockpicker Nick Train has upped his stake in long-term holding and current Scottish Premiership champions Celtic Football Club (CCP).

Train increased the stake in the club held by his Finsbury Growth & Income Trust from 2.5 million shares to 2.8 million or 3% worth £2.1 million at a share price of 74p.

Across his range of three investment funds, Train, co-founder and director of investment house Lindsell Train, holds more than 7% of club shares.

Canaccord Genuity initiated coverage on Celtic last year with a ‘buy’ recommendation and a target price of 103p.

Speaking to Citywire in 2011, Train said that he considered the then-valuation of Celtic at £35 million a significant discount to the embedded value of the business. Speaking more recently, financial analysts have estimated the enterprise value of the club as above £50 million.

In the second half of 2013 Celtic reported profit of £21.3 million compared to £14.9 million in 2012.

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Key stats
Market capitalisation£959m
No. of shares out315m
No. of shares floating284m
No. of common shareholdersnot stated
No. of employees1947
Trading volume (10 day avg.)2m
Turnover1,465m USD
Profit before tax57m USD
Earnings per share0.18 USD
Cashflow per share0.38 USD
Cash per share0.06 USD

*Correct as at 8 Aug 2014

Pace

Citywire A-rated mid-cap expert Richard Watts and small-cap veteran Dan Nickols have ramped up their stake in satellite set-top box manufacturer Pace (PIC) on a 16% slide in its share price.

The Old Mutual duo increased their holding in the business from 17.35 million shares to 18.96 million or 6% worth £57.8 million at a share price of 305p, off from a high in July at above 370p.

Shares in Pace dropped heavily at the end of last month following the departure of chief financial officer Roddy Murray, falling as much as 7% in a single trading session.

That was despite both JP Morgan and Barclays moving the company to an overweight rating, with price targets of 753p and 500p respectively.

Pace reported a 13.6% fall in revenue over the six months to the end of June but increased profits 9.3% to $55 million (£32.9 million) on higher-margin business growth and increased efficiency.

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Key stats
Market capitalisation£176m
No. of shares out298m
No. of shares floating290m
No. of common shareholdersnot stated
No. of employees1203
Trading volume (10 day avg.)0m
Turnover£231m
Profit before tax£-3m
Earnings per share-0.89p
Cashflow per share1.29p
Cash per share1.86p

*Correct as at 8 Aug 2014

Severfield

Citywire AA-rated UK equity income veteran Clive Beagles has upped his holding in steel fabrication business Severfield (SFR) as developers report increasing backlogs of work on a building boom.

Beagles upped his stake in the company from 44.6 million shares to 44.8 million or 15.1% worth £26.4 million at a share price of 59p, essentially flat over the past year.

The shares are held in his £2.7 billion JOHCM UK Equity Income fund, which he manages alongside AA-rated James Lowen.

Broker Jeffries lifted its price target on Severfield in July from 58p to 66p, rated buy. Canaccord Genuity rates the company a hold, with a target of 60p.

Purchasing manager index data for July showed plummeting construction subcontractor availability, increasing delays to orders, and the rates charged by contractors rising at a near-record pace. In results for the year to the end of March Severfield reported a profit before tax of £4 million versus a loss of £21.5 million previously.

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Key stats
Market capitalisation£133m
No. of shares out75m
No. of shares floating69m
No. of common shareholdersnot stated
No. of employees565
Trading volume (10 day avg.)0m
Turnover£43m
Profit before tax£2m
Earnings per share2.43p
Cashflow per share5.02p
Cash per share3.96p

*Correct as at 8 Aug 2014

Restore

Star stockpickers Paul Marriage and John Warren have trimmed their position in Restore (RSTP), a document management business.

The duo, both + rated by Citywire, halved their holding in the firm by selling 3.7 million shares for around £6.6 million. That still leaves them owning 4.6% of Restore.

Led by Charles Skinner – whose career has taken him from editing Management Today to running a dry-cleaner via stints in investment banking and private equity – Restore offers services including scanning, shredding, and office relocation.

Its share price has risen by 32% over the past year, during which time it has been busily snapping up rivals, including two in the north east and one in the north west in recent months to boost its geographic reach.

Marriage and Warren hold Restore in their £958 million Schroder UK Dynamic Smaller Companies fund, which has returned 64.4% over the past three years – beating both the 45% achieved by their average rival and the 49.8% from their benchmark index.

Other prominent investors backing Restore include A-rated Giles Hargreave, + rated Mark Slater, and AA-rated Gervais Williams.

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Key stats
Market capitalisation£139m
No. of shares out135m
No. of shares floating94m
No. of common shareholdersnot stated
No. of employees2334
Trading volume (10 day avg.)0m
Turnover£264m
Profit before tax£6m
Earnings per share4.75p
Cashflow per share10.35p
Cash per share0.24p

*Correct as at 8 Aug 2014

Epwin

Citywire AAA-rated small cap veterans David Horner and David Taylor have taken a chunk of the £94 million initial public offering of PVC window manufacturer Epwin (EPWN) Group.

The two managers took 4.35 million shares in the business or 3.22% worth £4.35 million at an issue price of 100p, later rising to 103p.

The business, now valued at £140 million, said it would use the proceeds to pay down part of its £10 million in borrowings. Henderson, Schroders and AXA Framlington are among the other fund groups who have backed the listing.

The company, which was founded in 1976 and was previously listed in the 1980s and 1990s before being taken private, last year reported pre-tax earnings of £21 million on revenues of £264 million.

The shares are held in their £338 million PFS Chelverton UK Equity Income fund, the best-performer in the UK Equity Income sector over three years with a return of 75% versus a peer average of 37.3%.

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Key stats
Market capitalisation£625m
No. of shares out49m
No. of shares floating45m
No. of common shareholdersnot stated
No. of employees4627
Trading volume (10 day avg.)0m
Turnover£995m
Profit before tax£43m
Earnings per share88.31p
Cashflow per share125.08p
Cash per share24.96p

*Correct as at 8 Aug 2014

Cranswick

Citywire AAA-rated investor Mark Barnett has increased his stake in pork producer Cranswick (CWK).

Through his Invesco funds, Barnett bought another half a million shares in the firm – worth around £6.4 million – to take his holding up to 12.3 million shares. That means he now owns fully a quarter of Cranswick.

The sausage and bacon specialist has been on a roll of late, with profit up 6% in the year to 31 March and its shares climbing 7% so far in 2014 while the broader market has been flat.

Oriel has a £13.60 price target for Cranswick, which supplies Weight Watchers among others, with the stock currently trading around £12.80.

Other prominent Cranswick fans include Jupiter’s AAA-rated Chris Watt and Barnett’s former colleague Neil Woodford, the A-rated manager holding the company in his newly launched eponymous fund.

Citywire data reveal that Barnett has returned 59% over the past three years, compared with an average of 40% from his peer group.

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Related Fund Managers

Richard Watts
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5/10 in Equity - UK Medium Companies (Performance over 3 years) Average Total Return: 75.69%
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David Horner
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David Taylor
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1/78 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 82.69%
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Profile: The opportunity set that attracted Brett Williams to wealth management

Profile: The opportunity set that attracted Brett Williams to wealth management

Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

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