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Shrewdies' shopping list: 10 stocks snapped up by Dobell, Plackett, Cross & co
by David Campbell on Jan 04, 2013 at 13:07
From integrated computer companies to Afrian miners, we take a look at what some of the UK's best managers have been buying.
Citywire AA-rated UK equity stars David Horner and David Taylor have ramped up their investment in surveillance business Petards Groups following a slump on its termination of takeover talks.
Taylor and Horner increased their backing for the business almost tenfold, from 54,600 shares to 500,000 or 4.60% worth £115,000 at a share price of 23p, down 39% since mid-October.
The shares are held in their small-cap focussed Chelverton Growth trust. Over three years the fund has returned 67.9% versus their smaller-companies peer group average of 47%.
Shares in Petards, which provides surveillance for public transport and emergency services globally, fell sharply last month after it said it had ended takeover talks with investment company Water Hall.
In results for the first half of the year, the business reported an operating profit of £51,000, up from £44,000 in the previous year, and earnings per share of 0.35p, up from 0.08p.
Citywire AAA-rated UK equity stars Anthony Cross and Julian Fosh have ramped up their exposure to asset manager Brooks Macdonald as the business closed in on another acquisition.
Cross and Fosh increased their investment in the business from 1.2 million shares to 1.52 million or just over 11% worth around £18.68 million at a share price of £12.25.
The stake is held in the duo’s Liontrust Special Situations and Liontrust UK Growth funds. The purchase follows Brooks Macdonald’s purchase of Channel Island based private client business Spearpoint for an anticipated total cost of £4 million, which increased its assets under management to £4.5 billion.
Cross told Citywire: ‘The business scores well through the investment process in having high recurring income, above 70%. Strong visible earnings help us take a long-term view of the business.
‘Brooks also scores well in [our] investment process’ second tier of analysis: procedures, formats, culture, customer databases and customer relationship.’
Small cap hedge fund manager David Newton, manager of the Helium Special Situation fund, has added to his investment in pensions administrator and investment manager Mattioli Woods.
Newton upped his investment in the company from 955,000 shares to 1.11 million worth just over £2.2 million at a share price of 199p, down 6.57% over the year to date.
The Helium Special Situations fund typically invests in under researched small and micro caps where it believes that the market has fundamentally misunderstood the embedded value in a business.
Mattioli Woods, which administers Self Investment Pension Plans (Sipps) and corporate pension schemes, reported assets up by almost a third to £3.02 billion over the 12 months to the end of May.
Sipps are expected to be a booming sector over the next year, as new regulatory rules on financial advisers force many to switch from taking commission on funds sold to charging clients directly.
Tom Dobell, one of the UK’s most respected equity managers and head of the £7.7 billion M&G Recovery fund, has upped his stake in troubled Sierra Leone iron ore producer African Minerals.
Dobell, the largest single fund manager invested in the business, increased his holding from 32.25 million shares to 33.79 million or 10.2% worth £85.49 million at a share price of 253p.
Shares in African Minerals are down 44.76% over the last 12 months, as operating losses have widened and a series of brokers have cut their recommendations against the company.
Speaking in October, Dobell expressed frustration with its underperformance but added that he maintained his faith in the business.
That faith was rewarded this week when it arranged a $92 million (£57.15 million) line of credit after poor weather delayed ore shipments. The delay had caused the company to warn that annual production would come in at the bottom end of previous estimates.
Small cap and tech specialist Max Royde has upped his backing for digital entertainment specialist Amino Technologies.
Royde, manager of the Kestrel Opportunities fund and previously head of tech stocks at broker Peel Hunt, increased his stake in the business from 4.93 million to 5.01 million or 9.12% worth £2.86 million at a share price of 57p.
In results for the six months to the end of May, Amino reported a return to profit, up £200,000 compared to a loss of £400,000 in the same period of the year before.
‘We have maintained good progress in our core markets, both in western Europe and north America, where our partnership network continues to grow, said non-executive chair Keith Todd.
‘Our investments in new products are also improving our competitiveness and opening up opportunities for growth in new markets.’ The company has committed to its maiden dividend payment this year. Over the last 12 months the shares have risen 44.3%.
Odey Asset Management’s UK star James Hanbury has upped his stake in Tanzania miner Shanta Gold as the business cleared previous bottlenecks and released ambitious output targets.
Odey increased its holding in the business from 32.16 million shares to 33.92 million or 7.35% worth £6.44 million at a share price of 19p, down almost exactly 50% from a year high of 39p.
Hanbury’s Odey UK Absolute Return fund holds the overwhelming majority of the stake, with less than 1% held by other funds within the company.
The apparent disconnect between the rapidly increasing price of gold and lagging gold miners has been much remarked upon in recent years, with many managers betting the gap will begin to close.
Broker Liberum nominated Shanta as its top gold small cap last week following a visit to its New Luika mine saying that production issues are close to being resolved. Shares in the business plunged in April as it raised new capital to fund additional investment in machinery.
Shrewd investor, activist and serial entrepreneur Bob Morton has ramped up his holding in car valet business Autoclenz as the company agreed to dispose of its assets and become an investment shell.
Morton increased his stake in the business from 100,000 shares to 798,757 or 7.68% worth almost £240,000 at a share price of 30p.Autoclenz secured shareholder agreement this week to sell off its operational assets and become an investment vehicle, backed by £3 million on its balance sheet and £1 million in borrowings.
Non-executive chair James Leek said that the decision had been taken due to the cost and challenge of maintaining an AIM listing in a low growth market.
‘Together with our advisers we shall now seek to acquire within this well-funded, clean AIM-listed shell company a high-growth business with a view to further increasing shareholder value,’ said Leek.
The valuation of the company has plunged since 2005 when it listed at a share price of 125p, and has since traded as low as 11p.
Citywire AAA-rated small-cap stockpicker Giles Hargreave has upped his stake in integrated computer systems manufacturer Concurrent Technologies.
Hargreave increased his stake in the business from 3.02 million shares to 3.63 million or 5.09% worth just over £2 million at a share price of 54p, up almost 20% year-to-date.
The shares are held in funds managed on behalf of private clients at Hargreave’s family stockbroker and investment manager Hargreave Hale.
In results for the first half of 2012 Concurrent reported a dip in profits, from £1.13 million in the previous year to £1.08 million, but increased its earnings per share from 1.45p to 1.46p.
The business has a large pile of cash on hand, with £5 million on its balance sheet, and for a research-intensive small cap offers a healthy return on equity, at 19.02% according to Reuters data.
This is in part attributable to the company’s programme of share buybacks, which has been active this year. It has also upped its dividend, from 0.6p per share to 0.65p.
BlackRock’s Citywire AA-rated head of small caps Richard Plackett has exited his investment in commercial and industrial printer manufacturer Domino Printing Sciences.
Plackett cut his holding in the business from 4.27 million shares or 3.83% worth £23.06 million at a share price of 539p, down almost 18% from a year high of 663p, to below a reportable stake.
The shares are held in his £1.41 billion BlackRock Special Situations fund, which seeks out undervalued and unappreciated turnaround stories.
Shares in Domino tumbled in March after Citigroup slashed its price target against the company from 645p to 579p.
The company does not look especially cheap relative to market however, trading at 15.23 times estimated 2012 earnings, versus the FTSE All Share average of 11.54, and yielding 3.76% versus 3.89%.
In an update in September Domino said sales over the 10 months to the end of August were 1% ahead of the previous year despite ‘fragile’ market conditions.
Veteran activist and deep value manager Christopher Mills has ramped up his backing for troubled European newspaper group Mecom as analysts anticipate a break-up of the business.
Mills upped his stake in the company from 4.17 million shares to 4.89 million or 4.03% worth £3.27 million at a share price of 67p, down 59% over the course of this year.
The manager runs the North Atlantic Value trust, which holds the majority of the shares, and is also a founder director of investment boutique JO Hambro Capital Management.
Mecom announced in July that chief executive Tom Toumazis would be stepping down as the business conducted a strategic review, following the sale of a series of divisions.
‘We see the company as a special situation and rate the shares a buy in anticipation of a break-up,’ said broker Peel Hunt in a recent note, quoting a target price of 170p.
Third quarter revenue at the company was down 10% with advertising revenue down 20%, although cost-cutting kept expected profit stable.