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Who bought Foxtons? Four eye-catching UK small cap trades
The recently listed estate agency features among the trades which stood out over the last few days.
Helium Special Situations fund ups One Media IP stake
The Helium Special Situations fund has inflated its stake in One Media IP, buying another 2 million shares worth around £250,000.
One Media only listed in April, when Helium snapped up 5.9% of it. The fund now owns 7.3 million of its shares, equivalent to 11.3% of the firm.
One Media buys the rights to old music and video recordings, then distributes them through the likes of iTunes and YouTube. It recently added the Skippy catalogue to its pouch, as well as music from Alvin Stardust and Kid Creole.
One Media’s half-year results in June revealed a pre-tax profit of £262,000 for the period, on revenues of £1.3 million, along with a first interim dividend and a healthy cash balance of £1.9 million.
Helium’s manager David Newton has long defied gravity: his returns have been more than double those of the FTSE over one, three and five years. Since 2008 he would have turned £100 into more than £500; the same amount in the index would be worth £200 today.
Giles Hargreave slashes Belvoir Lettings holding
Citywire AA-rated small cap stockpicker Giles Hargreave has slashed his stake in rental agent and property manager Belvoir Lettings as its shares take a tumble on renewed housing sales activity.
Hargreave cut his holding in the company from 1.31 million shares to 912,623 or 4.4% worth £1.5 million at a share price of 1.64p, off 14% from an August high of 192p.
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.
Broker Cantor Fitzgerald last month upped its price target against Belvoir from 175p to 200p, rated buy.
The outlook for the company appears to be less certain however, given that residential rental price inflation has begun to slow as congestion in the mortgage market began to ease.
While pressure on housing remains intense across the south east of England, some of that is now being diverted into purchasing activity, with surveyors reporting inquiries at record levels.
Fraser Mackersie ups CentralNic stake
Citywire AA-rated Fraser Mackersie has upped his conviction in internet domain-name administrator CentralNic after seeing an initial investment in its IPO rise 39.2% over the last month.
Mackersie increased his investment in the business from 2.63 million shares to 2.9 million or around 5% worth £2.61 million at a share price of 90p, up from its initial list price of 55p.
Alongside AA-rated co-manager John Mclure, Mackersie runs the Unicorn Free Spirit fund, an unconstrained growth strategy which has returned 73% over the last three years versus an average peer return of 36.4%.
Mackersie said CentralNic was well positioned to benefit from the release of new domain-name formats, such as .amazon, later this year.
‘The business model [is] compelling, with high levels of recurring revenue, strong growing margins and attractive cash generative characteristics.’
In its first set of results since raising £5 million through an AIM-listing in early September, CentralNic last month reported profit in the first half up 97.5% to £636,000.
Stuart Mitchell buys into newly listed Foxtons
S W Mitchell Capital (SWMC) founder Stuart Mitchell has taken a stake in estate agent Foxtons following its IPO.
Foxtons sold 60% of its equity at an offer price of 230p per share at its IPO in late September. Its share price subsequently rose strongly to break 300 pence in early October. Mitchell, who manages the SWMC European fund, bought 450,000 shares in Foxtons, a position that equates to less than 1% of the estate agent’s share.
Mitchell expects Foxtons stands to benefit from improvements in the UK economy and housing market.
‘The strong UK housing recovery we are currently seeing is becoming increasingly well understood – and is already represented in the fund via our holdings in Taylor Wimpey and Barratt Developments. However, Foxtons has exceptionally strong secular characteristics in addition to this macro-economic tailwind,’ Mitchell explained.
‘Despite being near ubiquitous as a brand in London, the business is still relatively small and should enjoy a double-digit growth rate in branch numbers over the next few years.’