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Five UK small caps these star managers have bought & sold

Julie Dean and Martin Cholwill feature in our roundup of the recent eye-catching trades at the smaller end of the market.

Key stats
Market capitalisation£60m
No. of shares out23m
No. of shares floating8m
No. of common shareholdersnot stated
No. of employeesnot stated
Trading volume (10 day avg.)0m
Turnover78m USD
Profit before tax5m USD
Earnings per share0.21 USD
Cashflow per share-99,999.99 USD
Cash per share0.38 USD

*Correct as at 21 Feb 2014

Veteran ethical investor snaps up filtration specialist

Peter Hall, a veteran ethical investor, has poured more money into filtration specialist Amiad Water Systems (AFS.L).

Through the Hunter Hall funds he manages in Australia, Hall has bought another 785,000 shares in Amiad for around £2 million. This means he now controls 4% of the company.

Hall has been investing for 29 years, with his firm applying a screen that excludes stocks which derive revenues from arms, tobacco, gambling, animal farming and testing, and the ‘unremediated’ destruction of the environment. Hunter Hall furthermore donates 5% of its pre-tax profits to charity each year.

Amiad has yet to recover from a profit warning in October, which immediately knocked 12% off its share price. The firm blamed the weakness on delays to some of its projects.

Separately, a billion-pound private equity group called Viola recently sold its entire stake in Amiad for £2 million, having originally acquired a quarter of Amiad in 2009. Viola exited at a share price of £2.55, after buying in at £1.40.

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Key stats
Market capitalisation£958m
No. of shares out285m
No. of shares floating283m
No. of common shareholdersnot stated
No. of employees10033
Trading volume (10 day avg.)0m
Profit before tax£42m
Earnings per share14.71p
Cashflow per share28.96p
Cash per share26.63p

*Correct as at 21 Feb 2014

Julie Dean sells down ceramics company Morgan

Citywire AAA-rated UK equity star Julie Dean has disposed of a big chunk of her holding in high-performance ceramic manufacturer Morgan Advanced Materials (MGAMM.L) as the company turns acquisitive.

Her employer Schroder cut its total exposure to the Morgan, formerly known as Morgan Crucible, from 15.15 million shares to 12.30 million or 4.31% worth £40.23 million at a share price of 327p.

Most of the shares are held in her £2.8 billion Cazenove UK Opportunities fund, with a chunk in AAA-rated Matt Hudson’s Cazenove UK Equity Income fund.

Morgan provides highly-insulating ceramic materials, used for applications such as airline black box recorders, body armour and medical devices.

Following a strong set of results last week, broker Investec upped its price target from 405p to 410p. In an interview with Bloomberg, chief executive Mark Robertshaw said the company would consider buying technology business to gain market exposure.

The company trades at a multiple of 14.7 times last year’s earnings, versus a peer-group average of 17.5.

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Key stats
Market capitalisation£2,110m
No. of shares out149m
No. of shares floating143m
No. of common shareholdersnot stated
No. of employees2601
Trading volume (10 day avg.)0m
Profit before tax£119m
Earnings per share80.19p
Cashflow per share99.80p
Cash per share633.07p

*Correct as at 21 Feb 2014

Cholwill adds to holding in popular Close shares

Citywire AAA-rated UK equity veteran Martin Cholwill has upped his stake in small but diversified banking business Close Bros (CBRO.L) as sell-side institutions and brokers aggressively up their price targets.

Cholwill increased his investment in the business from 4.43 million shares to 4.52 million of 3.03% worth £64.65 million at a price of £14.31, up 69% over three years versus a FTSE 250 return of 41%. The shares are held in his £909 million Royal London UK Equity Income fund.

A series of brokers rerated Close at the end of January following a strong end to 2013 and a bullish outlook for the next six months, with JP Morgan lifting its target from £12.42 to £13.57 and Canaccord Genuity from £14.30 to £15.

In a trading update covering the second half of 2013, the bank reported 4% asset growth in its fund management business to a total £9.5 billion and said it had grown its loan book by 4%.

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Key stats
Market capitalisation£294m
No. of shares out33m
No. of shares floating30m
No. of common shareholdersnot stated
No. of employees2810
Trading volume (10 day avg.)0m
Profit before tax£35m
Earnings per share126.77p
Cashflow per share159.11p
Cash per share186.38p

*Correct as at 21 Feb 2014

Hansa takes profits on Hargreaves

John Alexander, manager of the £282 million Hansa Trust, has sold more than £1 million worth of his holding in Hargreaves Services (HASE.L).

The sale of almost 160,000 shares for nearly £1.4 million still leaves Hansa Trust owning 2.5% of the coal group.

Alexander’s disposal came after Hargreaves released interim results that were welcomed by the market, particularly a 28% hike in its dividend.

Hargreaves is the UK’s largest producer and distributor of coal, operating mines across the country as well as importing the fuel and managing its transportation.

It has been weighed down by uncertainty over coal’s future, although the firm maintains that the substance is ‘a reliable, abundant, strategically important global energy resource’. And to reduce its dependence on domestic demand, Hargreaves recently won a maintenance contract for a power station in Hong Kong.

Hansa, a listed fund that is the investment vehicle of the Salomon family, focuses on companies with strong market positions at home, a presence abroad, and that sell to other businesses rather than consumers.

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Key stats
Market capitalisation£94m
No. of shares out960m
No. of shares floating639m
No. of common shareholdersnot stated
No. of employees16
Trading volume (10 day avg.)23m
Profit before tax£-1m
Earnings per share-0.40p
Cashflow per share-0.36p
Cash per share0.05p

*Correct as at 21 Feb 2014

Helium’s Newton adds to Coms holding

Small company hedge fund manager David Newton, of the sector-beating Helium Special Situations fund, has exploited a share placing to up his stake in business telecoms provider Coms Plc (AMAN.L).

Newton upped his stake in the company from 72.5 million shares to 95.5 million. Accounting for the dilution impact of the new shares, that took his holding in the business from below 9% to 9.95%, worth £5.73 million at a placing price of 6p, or £8.59 million at the open-market price of 9p.

Newton invests in under-researched small companies where he believes the market has misunderstood the value in a business, returning 129% over three years versus an International equity index of 8.7%. Helium Special Situations is an offshore fund managed by IS Partners in Switzerland.

Shares in Coms Plc have spiked 68.3% this year versus a FTSE AIM return of -1.74%. The new issuance will fund the company’s acquisition last week of cloud and data management business Actimax.

In a trading update at the end of January Coms said that revenue for the full year would be ‘significantly ahead’ of expectations.

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