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Four shares the pros are buying

Our regular roundup of trades by professional investors, featuring Booker, Diploma, Cambridge Cognition and Exova.

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If you would like to receive news alerts on any of the stocks featured, click on the star icons below to add them to your favourites.

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Key stats
Market capitalisation£3,320m
No. of shares out1,783m
No. of shares floating1,613m
No. of common shareholdersnot stated
No. of employees13533
Trading volume (10 day avg.)4m
Turnover£5,328m
Profit before tax£154m
Earnings per share8.58p
Cashflow per share10.05p
Cash per share9.02p

Booker Group

Citywire AA-rated global growth seeker Bill Bower has upped his stake in wholesale grocer Booker Group (BOK) as its shares drifted lower from a takeover price of 205p agreed with Tesco earlier this year.

The manager increased his holding in the business from below a reportable threshold to 89.5 million shares or just over 5%. This is worth £167.4 million at a price of 187.1p.

The shares are primarily held in his US-based $19.6 billion (£15.3 billion) Fidelity Diversified International fund, with a smaller stake in sister fund Fidelity International Discovery.

Shares in Booker spiked more than 16% in late January when Tesco revealed an audacious swoop to purchase the business.

Major shareholders in both companies have voiced unease about Tesco taking its eye off an ongoing strategy overhaul however, and the shares have drifted as the tie-up is scrutinised by regulators. Booker last month said that it expected the deal to complete late this year or early 2018.

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Key stats
Market capitalisation£25m
No. of shares out20m
No. of shares floating12m
No. of common shareholdersnot stated
No. of employees59
Trading volume (10 day avg.)m
Turnover£7m
Profit before tax£m
Earnings per share1.40p
Cashflow per share1.49p
Cash per share11.67p

Cambridge Cognition

Citywire AA-rated small cap selector Giles Hargreave has upped his stake in neuroscience software developer Cambridge Cognition (COGC) after its shares soared to a record high on its first ever profit.

Hargreave increased his investment in the company by 0.1 million shares to 2.2 million. This equates to just over 11% of the share capital, worth £2.7 million at a price of 123p. Its share price has risen by 220% over the last 12 months.

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

Cambridge Cognition produces research-grade digital tests used by drug and therapy developers tackling mental health issues associated with diseases, such as Parkinson’s and depression.

Its shares have soared since a March announcement that it made its maiden profit last year, with a 37% increase in revenue to £6.8 million putting it £780,000 into the black.

House broker finnCap rates the business a buy, on a price target of 130p.

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Key stats
Market capitalisation£600m
No. of shares out250m
No. of shares floating110m
No. of common shareholdersnot stated
No. of employees4167
Trading volume (10 day avg.)2m
Turnover£329m
Profit before tax£26m
Earnings per share10.35p
Cashflow per share18.48p
Cash per share20.92p

Exova

French fund house Oddo’s Citywire AA-rated team of small cap stock pickers has upped its position in fire-proofing and materials testing service Exova (EXO), as shareholders give the nod to a buyout offer.

The four managers increased their investment in the Edinburgh-based company from 6.3 million shares to 6.5 million. This equates to 2.6% of the share capital, worth £15.6 million at a price of 239.75p.

The shares are held in the £2.2 billion Oddo Avenir Europe fund, run by AA-rated Grégory Deschamps, Frédéric Doussard, Sebastien Maillard, and A-rated Pascal Riégis.

The price is just below the 240p per share acquisition offer from rival materials testing business Element, which was given a seal of approval by more than 80% of Exova shareholders last week.

Shares in the company had already climbed 36% to 220p ahead of the announcement of the deal in March, on rumours majority shareholder, private equity house Clayton Dubilier & Rice, was looking for an exit.

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Key stats
Market capitalisation£1,271m
No. of shares out113m
No. of shares floating111m
No. of common shareholdersnot stated
No. of employees1600
Trading volume (10 day avg.)m
Turnover£383m
Profit before tax£38m
Earnings per share33.88p
Cashflow per share46.79p
Cash per share18.19p

Diploma

Citywire AAA-rated small cap star Harry Nimmo has upped his stake in lab equipment manufacturer Diploma Plc (DPLM), after its shares dropped back following a strong run of performance.

Nimmo increased his holding in the company by 0.1 million shares to 5.7 million. This equates to a little over 5%, worth £62.9 million at a share price of £11.03, just off the all-time peak of £11.35 reached last month.

The shares are primarily held in his £1.3 billion Standard Life UK Smaller Companies fund, with a smaller stake held by A-rated colleague Andrew Paisley’s Global European Smaller Companies fund.

The pause in Diploma’s recent ascent followed a 53% climb in the 12 months to May, stoked by the competitive boost of a slide in sterling which lifted company revenue 20% in the six months to April.

Analysts have cooled on the stock as it has got dearer however, with the current value only just below a median price target of £11.29.

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