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What Abramovich bought: five shares on professional hit lists

A roundup of trades by professional investors, including Roman Abramovich. This time we look at Velocys, Lavendon, DDD, E2V and API.

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Key stats
Market capitalisation£274m
No. of shares out117m
No. of shares floating97m
No. of common shareholdersnot stated
No. of employees100
Trading volume (10 day avg.)0m
Turnover£5m
Profit before tax£-17m
Earnings per share-14.60p
Cashflow per share-13.84p
Cash per share22.64p

*Correct as at 20 Jun 2014

Abramovich doubles stake in Velocys

Chelsea-owner Roman Abramovich has bitten off another big chunk of biofuels company Velocys (VLSV ) having nearly doubled stake in the business over the past month.

Abramovich, via his Ervington Investments vehicle, upped his holding in the company from 7.75 million shares to 9.02 million or 7.71% worth £19.94 million at a share price of 221p.

The announcement went out to the market last Wednesday evening. The following morning shares in the business were up 6%, with additional impetus from the initiation of coverage by broker Cannacord Genuity as a speculative buy on a price target of 400p.

Numis rates the company a buy with a price target of 227p. Abramovitch’s purchase puts him among the top four investors in the company, behind Lansdowne Partners, Citywire AA-rated Henderson UK Equity Income manager James Henderson and Ruffer.

Since he initially invested in the business at the end of 2012 shares have risen just over 50%. Previously known as Oxford Catalysts, the company converts waste-generated methane gas into liquid fuels.

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Key stats
Market capitalisation£367m
No. of shares out169m
No. of shares floating163m
No. of common shareholdersnot stated
No. of employees1617
Trading volume (10 day avg.)0m
Turnover£235m
Profit before tax£16m
Earnings per share9.55p
Cashflow per share35.84p
Cash per share8.28p

*Correct as at 20 Jun 2014

Dan Nickols cherry picks Lavendon

Old Mutual small and midcap veteran Dan Nickols has upped his stake in small-cap darling Lavendon (LVD ) following three months in which a previously inexorable rise in its share price has taken a breather.

Nickols took derivative exposure in the company equivalent to 2.93 million shares to give him a total exposure to 11.81 million shares or 7% worth £25.52 million at a share price of 216p.

Shares in Lavendon rose 159% over three years up to a peak of 246p at the end of March, when it was caught up in a wider market rotation from mid to large cap stocks. It has since slid 12%.

Broker Cantor Fitzgerald rates the company a buy with a price target of 255p while Peel Hunt rates it a buy with a price target of 275p. The business, which rents out cherry pickers, has successfully rejuvenated its business in recent years, switching out of moribund European construction markets into the Middle East

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Key stats
Market capitalisation£9m
No. of shares out137m
No. of shares floating44m
No. of common shareholdersnot stated
No. of employees35
Trading volume (10 day avg.)0m
Turnover2m USD
Profit before tax-2m USD
Earnings per share-0.01 USD
Cashflow per share-0.01 USD
Cash per share0.01 USD

*Correct as at 20 Jun 2014

Bob Morton dives on DDD shares

Veteran activist and serial small-cap investor Bob Morton has ramped up his holding in imaging and 3D technology business DDD Group (DDDL) following 12 months in which its share price has slumped 71%.

Morton, an accountant and regular feature on the Sunday Times’ Rich List, upped his stake in the business from 6.25 million shares to 10.5 million or 7.31% worth £525,000 at a price of 5p.

Broker Canaccord Genuity rates the business a buy with a price target of 50p.

DDD Group shares rose more than 5% following the notification of the purchase. The company owns Yabazam, an on-demand service streaming 3D content for TV and portable devices.

Take-up of home 3D technology has disappointed initial industry expectations. 3D-compatible devices, a boom area just a few years ago, have largely disappeared from industry shows.

Revenues at DDD Group more than halved in 2013, falling from $8.62 million (£5.07 million) to $3.4 million. The company said it will re-orientate to focus on ‘rapidly growing 2D streaming video’.

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Key stats
Market capitalisation£362m
No. of shares out217m
No. of shares floating208m
No. of common shareholdersnot stated
No. of employees1525
Trading volume (10 day avg.)0m
Turnover£200m
Profit before tax£27m
Earnings per share12.38p
Cashflow per share17.77p
Cash per share5.22p

*Correct as at 20 Jun 2014

Clive Beagles trims e2v holding

Citywire AA-rated UK equity income veteran Clive Beagles has pared his exposure radio, microwave and semi-conductor specialist component maker e2v (E2V) as its dividend slipped below 3%.

Beagles cut his investment in the company from 10.96 million shares to 10.66 million or 4.92% worth £17.58 million at a price of 165p, up 40.4% over one year versus the FTSE All Share return of 9%.

The shares are held in his £2.6 billion JOHCM UK Equity Income co-managed by James Lowen, also AA-rated.

Broker Peel Hunt last week lifted its recommendation to buy from hold and its target price from 155p to 185p. Investec rates the company a buy with a price target of 215p.

In results for the year to April, Chelmsford-based e2v reported revenue up 11% at £217 million and profit up 8% at £34.7 million. The company trades at a slight discount to its peer group, at 14.4 times last year’s earnings compared to an average 17.4 times.

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Key stats
Market capitalisation£57m
No. of shares out77m
No. of shares floating71m
No. of common shareholdersnot stated
No. of employees543
Trading volume (10 day avg.)0m
Turnover£112m
Profit before tax£6m
Earnings per share7.22p
Cashflow per share10.03p
Cash per share8.30p

*Correct as at 20 Jun 2014

Giles Hargreave hangs on to APi

Citywire AA-rated small cap stockpicking veteran Giles Hargreave has increased his stake in specialist foils, holograms and laminates business API Group (API) after it was downgraded by Numis. Hargreave upped his holding in the company from 3.81 million shares to 3.84 million or 5.01% worth £2.77 million at a price of 72.8p, up 126% over three years versus a FTSE All Share return of 20%.

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. Numis had earlier cut its recommendation on the stock from buy to add with a price target of 85p.

That followed the release of full-year results for API for the year to April, showing revenue up 2% to £2.3 million and profit static at £5.6 million.

The company announced a full-year dividend of 2p per share however, its first since 2006, and cash of £200,000 versus £2.6 million debt previously, its first surplus since 1999.

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