Brooks Macdonald & four other stocks on fund manager hit lists
A roundup of trades by professional investors. This time, we look at Chemring, Renew, Brooks Macdonald, Brammer and GB Group.
Citywire AA-rated Paul Marriage has trimmed his investment in defence group Marriage trims Chemring (CHG) following several years of disappointing returns as the group restructures and paid down debt.
Marriage reduced his investment in the business from 11.54 million shares to 8.02 million or 4.15% worth £18.13 million at a share price of 217p.
The shares are held in his £1.3 billion Cazenove UK Smaller Companies and £438 million Cazenove Absolute UK Dynamic funds.
Shares in Chemring are down 66.4% over three years. JP Morgan recently cut its price target on the stock from 260p to 240p, rated neutral.
Company revenue has fallen from £724 million to £624 million since 2011 while profit has fallen from £213 million to £186 million, leaving it exposed to debt costs from a previous acquisition cycle.
The company has announced a wave of disposals under chief executive Mark Papworth, bought in last year to head a turnaround, including the £138 million sale of its munition business last week.
Hargreaves takes profits after Renew's jump
Citywire AA-rated small cap stockpicking veteran Giles Hargreave has sold into a renewed outburst of strength in engineering group Renew Holdings (RNWH) as its shares were upgraded on acquisition news.
Hargreaves trimmed his stake in the company from 8.04 million shares to 7.97 million or 12.97% worth £19.68 million at a share price of 246.9p.
The shares are held on behalf of private clients at his broker and investment business Hargreave Hale, and in portfolios it manages on behalf of Marlborough Fund Managers.
Renew bounced more than 17% at the end of April as broker Numis raised it to ‘buy’ from ‘add’ and lifted its price target from 215p to 260p, following news it was spending £17 million to buy wireless telecoms specialist Clarke Telecom.
Shares in the business has been on a sprint up to March, rising 149% over the previous 12 months, but after topping out at 247p the company has largely traded sideways.
Cross and Fosh build Brooks stake
The two managers increased their holding in the company from 2.12 million shares to 2.15 million or 16.17% worth £36.70 million at a share price of £17.07.
The shares are held in both their £1.23 billion Liontrust Special Situations fund and their £243 million Liontrust UK Growth fund.
Investment and financial planning business Brooks Macdonald has largely traded sideways since topping out at a record high of £18.09 in early March.
Liontrust is a long-term shareholder in the business having bought into its initial float in 2006 at a price of £1.50.
Thomas trims Brammer stake
Thomas reduced his investment in the business from 13.47 million shares to 12.91 million or 9.99% worth £61.45 million at a share price of 476p.
Shares in Brammer surged more than 180% over the three years to September 2013, but have since largely traded sideways as it has issued shares and a European industrial recovery proved elusive.
The shares are held in his £4.85 billion AXA Framlington UK Select Opportunities fund, which remains the largest shareholder in the business.
A number of analysts have downgraded the company in recent weeks, with N+1 Singer cutting its price target to 440p as it reduced its recommendation to a sell while Jeffries cut its target to 440p.
Octopus Investments has wrapped its tentacles around more of a specialist in identity data. Octopus has bought another 289,000 shares in GB Group (GBG), worth around £400,000. That means Octopus now owns a total of 4.4 million GB shares, equivalent to 4% of the whole firm.
Citywire A-rated fund manager Richard Power holds GB in his Octopus UK Micro Cap Growth fund. The fund has returned 65.7% over the past three years, compared with an average of 61.9% from his peer group of small-cap investors.
GB hasn’t performed too shabbily through that period either: since 2011 its share price has quadrupled from 38p to more than £1.50.
As a business, it sells what it calls ‘identity intelligence’; its activities range from recruitment background checks to validating bank accounts.
It recently raised £11 million to buy DecTech Solutions, an Australian fraud and credit risk manager. GB predicted that the acquisition would immediately enhance its earnings. When announcing the deal, it also lifted its profit guidance for the year ending 31 March 2014 from the £7 million estimated at the start of April to £7.2 million – which would be 30% more than in the previous year.