AIM shares lifted by ISA buying

Well, it has been a few weeks since UK investors could put AIM shares in their tax free ISA's and it looks like this has provided a lift for AIM companies.

Aug 9 (Reuters) - London's beleaguered junior stock market is on track for its best weekly volumes in two months, fuelled by rule changes that prompted investors to snap up stocks, particularly in the beaten-down basic resources sector.

The lurch higher in volumes on AIM, a sub-market of the London Stock Exchange, followed implementation on Monday of a government plan to let people invest in small firms while avoiding tax to help drive economic recovery.

http://uk.reuters.com/article/2013/08/09/europe-stocks-aim-idUKL6N0G92IP20130809

That's a few weeks ago, but anyone following AIM shares cannot help but have noticed that the price on many seems to be up while in general the main market has been going through a will it, won't it, finally correct this summer mood.

In the last month the FTSE AIM all share is up over 4%, compared to -2.7% for the FTSE100 and  + 0.36% for the FTSE250.  Certainly some of the shares that I follow, which tend to be the more liquid AIM companies, do seem to have found a flurry of buying that has resulted in higher prices. This shouldn't be a one way ticket though as these shares still offer more volatility and can surprise big time if they announce something the market doesn't like.

Silverdell updates the market, remains suspended

The latest Silverdell update to the market may sound like better news for shareholders with confirmation of banking facilities, but the shares remain suspended.

When the suspension is lifted it is most likely to include a fundraising at some point and at least one knowledgeable smaller company analyst has guessed that the share price upon lifting of the suspension could well be in the 4p-6p range, around 50-60% lower than the suspended price.

http://www.stockopedia.co.uk/content/small-cap-value-report-14-aug-sid-qpp-mur-pgb-you-eck-76200/

4p-6p is a lot better than nothing, but it does mean a hefty dilution of the share price for share holders. Despite all this there has been no mention from the company as to who is going to accept blame for what looks like a costly mistake that put part of the company into administration. You might expect that heads would roll. I mean, it is not unreasonable to ask whether the management really is good enough if no one wants to take responsibility for what happened. Who would want to invest in such a company?

William Hill, Ladbrokes and 32Red, where next?

It's been a while since I looked at the UK gambling sector (for anyone interested in previous posts click on the labels below) and it seems to be a sector that continues to recover, although some companies appear to be hotter and more in favour than others. I came across this analysis today that is worth a read and it does save me the time of going into the fundamentals.

http://bulmerinvestments.com/betting-on-gamblers/

It covers William Hill, Ladbrokes and AIM tiddler 32Red, which was flagged up here some time ago as one of the few potential smaller company takeover targets left in the sector. Naked Trader Robbie Burns seems to have bought it with a view to holding it in the hope of a takeover at some stage.

These three can actually be compared to a three horse race, William Hill being the class of the field, Ladbrokes, the underachiever who promised so much but has failed to deliver and 32Red a complete outsider with bags of potential. Bookies would probably have William Hill as the odds on favorite, with Ladbrokes and 32Red vying for some long shot money.

William Hill's recovery in the last couple of years seems to go on and on. The share price is now heading towards 500p and there is a lot of good news and expectation in that price going forward. They are no longer cheap and it would be easy to imagine a bad set of results hitting the share price hard, but so far the company has delivered.

Ladbrokes is the opposite.  They have everything to prove and will hope that their deal with Playtech leads to an improved bottom line from their online offering. If they are finally putting things right then compared to William Hill they are cheap. The article above makes a case for the upside if Ladbrokes has finally got its act together.

32Red has the attraction of perhaps being an eventual takeover bid from one of the bigger players. In the meantime it is a decent company in its own right and from next Monday as an AIM share it can be put in an ISA. It's more of a gamble than the other two, but if it attracts the interest of a bigger player it won't be sold for its current forward P/E of around 10.

Silverdell buys a bit of itself to save itself.

Silverdell made a further announcement today following on from its statement of why its shares were suspended on AIM a few weeks ago.

Silverdell announces that on 23 July 2013 its subsidiary, Euro Dismantling Services Ltd ("EDS") acquired the business and certain assets of Kitsons Environmental Europe Limited (In Administration) (the "Kitsons Business"), thereby keeping the Kitsons Business within the Group. The Kitsons Business will operate as a separate division of EDS, with the objective of maximising cost efficiencies between the existing EDS division and the Kitsons Business and to facilitate a seamless transfer of ongoing customer contracts and relationships to EDS.

The consideration for the acquisition is payable in cash on a deferred basis and is capped at £8 million (subject to downward adjustment (if applicable) following the completion of a valuation of the Kitsons Business by an independent valuer). The deferred consideration is intended to be satisfied from the Group's banking facilities at that time.

http://www.digitallook.com/news/rns/21047864-188986/SID-Acquisition_html?ac=,&username=,

Looks like what has turned out to be a fairly costly mistake has been made somewhere along the line. The company is getting support from its bankers, but it could end up looking to raise more cash at some stage. Shareholders might be wondering what the share price will look like when the suspension is finally lifted, but I suppose they can be thankful that they will still have something rather than nothing which many might have feared a couple of weeks ago.

IQE, trading update in

IQE reported today and perhaps the good news, at least for now, was in the price rise of the last couple of weeks as the shares finished down on the day having been up almost 10% at one stage.

The Board expects first-half performance to be ahead of market expectations, with first-half revenues approaching £63 million, EBITDA in excess of £10 million and net debt below £39m. This represents revenue growth of over 80%, and EBITDA growth of over 150% compared with the first half of 2012.

http://www.digitallook.com/news/rns/21046928-24795/IQE-IQE_plc_H1_trading_update_html?ac=,&username=,

Pretty good release, expected to be ahead of expectations for the first half, but then they end with the belief that the group is on track to meet market expectations for the full year. Qualcomm fears remain and given the effect on the share price since February of what the US giant might be planning, chances are that volatility in IQE's share price won't go away just yet.

IQE, still rising ahead of results

IQE report eagerly awaited results tomorrow that will have both bulls and bears of the stock on the edge of their seats. As reported here, IQE had been until recently under a constant short attack, the share price having fallen from a high of over 37p back in February to a low of around 18p in early July on the back of competition fears from US giant Qualcomm. According to shorttracker.co.uk, BlackRock still holds a 2.7% short position. That's fairly hefty considering the recent pre-result bounce in the share price to 27p today.

A good result tomorrow could easily send the shares higher, but I was slightly mystified by the BlackRock short position given the recent rise unless they are just trading this as a hedge? A check of the major IQE shareholders shows the following.

Blackrock Investment Management 37,076,124 5.74%.

http://www.iqep.com/investors-shareholderdata/

So, BlackRock have over 5% of the shares and are both long and short the stock. BlackRock Investment Management are down as holding 0.90% of that 2.70% short, the rest being held by other parts of the BlackRock empire. Perhaps it is just a hedge on Qualcomm fears?

Truth is no one knows what the company will announce tomorrow as so little has been said in the run up. Expectations are high that results will be in line or exceed expectations, so there is a risk after the recent bounce that there could be a sell off on the news if they disappoint. The results could still be fairly good and yet fall if there is profit taking on the news (trade the rumour, sell the news). Alternatively, it could break out further tomorrow, especially if expectations are exceeded. The IQE daily and weekly charts are looking more positive though, so, everything to play for.

Many brokers are still rating this as a 40-50p plus share, but it won't necessarily get there straight away, and we are still waiting for further details of what Qualcomm intends to do that started off the recent fall in IQE's share price. There could be further volatility ahead once Qualcomm makes up its mind.

http://www.guardian.co.uk/business/marketforceslive/2013/feb/22/iqe-semiconductors-competition-qualcomm

AIM shares in ISA's from 5th August

The date has finally been confirmed when AIM shares can be bought in UK tax free ISA's.

The government has confirmed that risky smaller shares will be allowed in stocks and shares ISAs from 5 August.

From August investors will be able to invest in shares listed on non-traditional stock exchanges, including the Alternative Investment Market (AIM) and lesser-known ICAP Securities and Derivatives Exchange (ISDX).

Investors will also be able to hold shares listed on alternative European stock exchanges.

http://www.citywire.co.uk/money/aim-shares-to-be-allowed-in-isas-from-5-august/a692123

Perhaps the key word here is "risky".  This has both its good and bad side (AIM shares in ISA'S, the dark side and buyer beware) so it's important to understand the level of risk, especially with AIM regulation being so weak.

Silverdell, finally a statement

It's been a couple of weeks since Silverdell announced their suspension of dealings on AIM, finally this morning a company statement has been issued.

The Group announced on 2 July 2013 that it had requested a suspension of trading in Silverdell's shares pending clarification of the Group's financial position. This followed the appointment of administrators to Kitsons Environmental Europe Limited ("Kitsons"), one of the Group's principal trading subsidiaries.

The Board is pleased to confirm that discussions with the Group's bankers, HSBC, have reached a satisfactory outcome. HSBC has confirmed that it remains supportive of the business and will be providing additional short term facilities to the Group.

The Board also confirms that Kitsons is the only Group company which is in administration, and that all other Group companies continue to trade as normal. The Board is extremely grateful to the Group's employees, customers and suppliers for their patience and forbearance.

Further announcements will be issued in due course.

http://www.investegate.co.uk/silverdell-plc--sid-/rns/further-re-suspension-of-dealings/201307160700073973J/

This basically confirms the main rumour that the problem was with with a winding up order against Kitsons and it has clearly taken some time to negotiate with their bankers to continue to support the group. The group says that it is "extremely grateful to the Group's employees, customers and suppliers for their patience and forbearance", which is all very well, but perhaps they should have mentioned shareholders of the company as well who have been kept in the dark for a couple of weeks.

Next will be the lifting of the suspension and the market reaction to events. If there has to be a fund raising, a dilution of the shares, then expect the share price to be lower, perhaps significantly lower.

http://sevenpillarstrading.blogspot.co.uk/2013/07/silverdell-whats-going-on.html

IQE, are the shorts closing? Watch for their results later this month

One share that I've been following for quite a while is IQE, a technology company on AIM that calls itself a global leader in advanced semi conductor wafers.

From the company website;

IQE's products are found in many leading-edge consumer, communication, computing and industrial applications, including a complete range of wafer products for the wireless industry, such as mobile handsets and wireless infrastructure, Wi-Fi, WiMAX, base stations, GPS, and satellite communications; optical communications, optical storage (CD, DVD), laser optical mouse, laser printers & photocopiers, thermal imagers, leading-edge medical products, barcode, high efficiency LEDs and a variety of advanced silicon based systems.

The manufacturers of these chips are increasingly seeking to outsource wafer production to specialist foundries such as IQE in order to reduce overall wafer costs and accelerate time to market.

http://www.iqep.com/about/

The share price can be quite volatile, both up and down. It is a blue sky opportunity that has great potential, most of the brokers covering the company have placed a much higher price target for it than its current low of around 18p. Many see 50-65p as the target range.

Silverdell, the silence is deafening.

It's been over a week since the suspension of shares at AIM tiddler Silverdell, yet there has still been no statement from the company.

At the very least this is a poor show as investors in the company have been left in the dark as to what is going on. This has only served to add to rumour of what may or may not have happened.

The worst case scenario here is that the reason for the silence is because whatever the problem was that resulted in suspension is not that easy to clear up. Perhaps it is bigger than first thought? Who knows, but unfortunately the company silence doesn't help in the matter.

AIM shares in ISA'S, the dark side and buyer beware

It was perhaps ironic that after the announcement over the weekend that AIM shares would be allowed in tax free share ISA's from later this year, the market opened up Monday with a couple of its constituents under suspension.

Silverdell and Pursuit Dynamics had their listing suspended, the former has yet to release a statement as to why, while the latter did so yesterday. In the absence of any information there has been much speculation about what has happened to Silverdell. Time will tell, but while there may be celebration that AIM shares can finally be included in ISA's, it is important to understand that many of these companies are high risk and regulation is very light touch.

AIM is a market that has its critics, Tom Winnifrith being one of the most vocal. Here's what he has to say about the decision to allow AIM companies into ISA's.

The crap at the bottom of AIM which is loss making now and always will be cannot attract institutional funding for a good reason. The bottom 450 companies on AIM are just not investment grade material.

Most are resource stocks or investment companies or just plain joke companies. They create no real jobs in the UK and in most cases merely seem to exist to support the same band of directors (who rarely have big stakes in the firms) and to pay fat City advisors fees. They simply DO NOT create very many jobs in the UK. The firms that create most jobs are small private companies. Claims that AIM creates real jobs outside the boardroom and the Square Mile on a meaningful scale are simply false and were part of the spin that financial services companies & City financiers served up to push for this ISA change.

This change will create very few if any real new jobs. Whether it will assist Middle England is saving in a more prudent, careful and measured manner is also something about which I have grave doubts. But the jury is out on that for now.

Will a flood of ISA money revive the Cesspit? Of course not. There will not be a flood of money for the small cap end of the market. For it to recover AIM regulation needs to kick out the miscreants who lie to investors, restore trust in the market and finally to attract a few real companies that make things rather than just more and more cash shells, investment companies and third rate resource exploration plays. Will that happen? I see no signs of it.

http://www.shareprophets.com/views/892/aim-shares-in-isas-misguided-folly-driven-by-city-misinformation
(Registration to site needed to access articles)

Not all AIM companies are bad and things can go wrong at any of them, but anyone buying them needs to be aware that even after you have done your due diligence you might just get a bad one and sometimes you won't know it until it happens.

ShareSoc also exists to look after the interests of UK investors, associate membership is free.

http://www.sharesoc.org/membership.html

Silverdell, what's going on?

Being a self regulated market AIM can throw up potential nightmare stories for investors from time to time. At face value things can look good with a company, results look impressive, news flow from the company itself positive, but the share price is declining, an investor may wonder why or question whether there is something not quite right going on?

Other than market drift which can often hit smaller company shares in a big way, it's difficult to know sometimes why a share price of a company that may be on reasonable fundamentals is falling. It might be technical, sometimes there's a rumour which often the company will deny. Investors will often blame the market makers, the short sellers, bears of the company, but with AIM companies a bolt out of the blue can happen at any time it would seem. Shareholders are often the last to know.

One company I've been following for a while is Silverdell, in part because although the share price was falling, and other than a rumour that a cash call to aid further growth might be needed - denied by the company, it seemed to have a lot going for it. Then suddenly today its shareholders were presented with this.

Suspension of Dealings

Silverdell has requested a suspension of its shares from trading pending clarification of the Group's financial position.  Further announcements will be made as and when appropriate.

http://www.investegate.co.uk/silverdell-plc--sid-/rns/suspension-of-dealings/201307020730033712I/

Silverdell investors will have woken up to this, I suspect largely unexpected news and wondered to themselves what is going on? After all, the company itself was very bullish if it's own recent statements are anything to go by.

This is what Silverdel's CEO Sean Nutley said in April.

‘We are targeting 15% year-on-year revenue growth over the next three years. The market only has us at 8%,’ he states. ‘At the 8% forecast growth rate, we can support that growth without going out for further funding from a bank or elsewhere. If we want to go to 15% growth, we will need additional financial support.’

http://www.sharesmagazine.co.uk/articles/silverdell-mulls-the-price-of-growth

Then in June.

Today Nutley tells me that Silverdell no longer needs additional working capital to hit the 15% target. ‘We’ve been able to get the right mix of business and right payment profile to meet our strategic targets,’ he states. Additional money is only needed if the group finds a way to ‘supercharge’ growth beyond the 15% rate, adds the CEO.

http://www.sharesmagazine.co.uk/news/silverdells-communication-challenge

So, have they suspended because they want more funding to "supercharge" at 15%+?  Most unlikely. Shares tend to be suspended for far more serious reasons, although you would be forgiven for wondering where the serious reason is in this case, but there just might be one.

AIM shares become ISA eligible from this autumn

News today confirmed that UK listed companies on AIM can be bought for tax free share ISA's from this autumn.

"Over 1,000 companies listed on the Alternative Investment Market (Aim) will now be eligible for direct Isa investment," the Treasury said. "The changes will provide savers with a tax-efficient way to hold shares traded on SME [small and medium-sized companies] markets."

http://www.telegraph.co.uk/finance/personalfinance/investing/isas/10153431/Birth-of-the-IHT-free-Isa-as-ban-on-Aim-shares-is-lifted.html

 

BATM profit warning - the dangers of swimming with the smaller company tiddlers

A while back I had a small position on tech company BATM Advanced Communications. It was a blue sky option, quite risky, but the news flow had been good and the trend was up, good things were expected. I actually closed that trade, in part out of the boredom of waiting, for a small profit.

Today, BATM reported to the market a profit warning and like all bad news, perhaps even more so when it comes from a smaller company, you can expect fireworks on the share price.

Networked telecoms group BATM Advanced Communications warned it expects first half revenue and profit to be materially below management expectations.

The group, which provides technologies for the networked telecoms and medical laboratory equipment markets, said components supplied by third parties failed to arrive during May as scheduled, and consequently it was unable to fulfil orders and was forced to postpone deliveries.

"However, the backlog remains substantial and, with certain components required to complete some orders having been received, the group is working towards clearing this in the second half of 2013," it explained.

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=11175&action=news&story_id=20945622

Another smaller company that had been going well until recently was IDOX. It's recent report also disappointed and fell below expectations.

The Company is encouraged by the underlying progress made in all of its businesses during the first half and continues to be excited by the multiple growth opportunities available to it. However, in light of a slower than expected first half of the year, the Board now thinks it is prudent to anticipate full year EBITDA is likely to be no less than £18 million, which reflects uncertainty of timing as to when those opportunities will crystallise.

http://www.digitallook.com/news/rns/20926283-30992/IDOX-Trading_Statement_html

Both companies seem to be suggesting positive times ahead, that these failures may simply be a blip, but the lesson to investors is clear, the unexpected announcement will hit your shares hard and fast. So fast that if you are in and without a stop loss there is almost no chance of getting out quickly when the bad stuff hits the fan. Even if you have a stop loss, it would need to be guaranteed, otherwise the fall would go straight through it. The same can be true of the bigger companies of course, but smaller companies, especially those with stretched valuations on the back of momentum, can dive a lot quicker when things go wrong, or don't work out  as the market expects.

Charts below;

Quindell Portfolio - Incredibly cheap or crash and burn - Part 2.

Quindell Portfolio is one of the smaller AIM companies that I have been following recently. On paper it seems a remarkable story and looks like one of those penny share tiddlers that many investors dream about. The type of share that can be had for a few pence, but looks to have the potential to go much higher, a ten bagger or much more.

For some investors it is psychologically nice to own a lot of shares in a company and penny shares have always had their own unique attraction, although in reality they are often expensive if only because there are often hundreds of millions or billions of shares to be had. Penny share companies will often have a new issue to fund new ventures going forward or simply to raise more cash in order to survive. This will dilute any holding you may have, even if it does look good to hold a lot of shares you still don't have value and many small investors have been burned by smaller company penny shares.

Such companies tend to attract a strong vocal following and Quindell, certainly if bulletin boards are anything to go by, has its fair share of committed followers. It was recently in the news for all the wrong reasons as mentioned here which attracted the attention of short sellers, the share price being in free fall for several days. The debate on the BB's got very heated between defenders and attackers (bulletin boards on fire), the share price recovered slightly, but still lags, the trend looking horribly down.

Some have suggested that there are enough red flags about this company to make it one not to invest in. Others that the story is a good one with enough positives to suggest that the market is seriously undervaluing its worth. The market can be a strange place, because there certainly are plenty of companies doing far less than Quindell that have silly valuations applied to them. Nevertheless the market still doesn't quite believe the Quindell story, that what looks to good too be true may be exactly that.

Furthermore, the CEO of Quindell was previously the CEO of a similar company called the Innovation Group. That company grew by acquisition and its share price flew on the back of it. The rapid growth by acquisition at that time didn't stop the share price eventually collapsing though and Innovation is still a long way off its past share price highs and may never get back there. Thanks to the internet it is not that difficult to dig up some of the past history of Innovation and you do wonder if history is repeating itself.

Monitise, a five bagger in the making?

The Monitise share price got a lift towards the end of last week after it was revealed that one hedge fund manager had come out saying that this one might be a big winner going forward.

Billionaire hedge fund manager Leon Cooperman listed some of his favorite stocks on Thursday and said the biggest winner of all might be mobile banking company Monitise.

"That's a five bagger," Cooperman, who runs Omega Advisors, said about Monitise at the SkyBridge Alternatives Conference on Thursday. "That's the one I would pick to win a contest with," he said on a panel that discussed fund manager's best ideas.

http://www.reuters.com/article/2013/05/10/uk-hedge-fund-cooperman-idUSLNE94900120130510

Fairly confident prediction there. Perhaps one of the better blue sky opportunities out there, but those interested need to remember it has yet to turn a profit.

Quindell Portfolio, Bulletin Boards on fire, shares continue to fall.

The sorry case of the falling share price of Quindell Portfolio continues to heat up debate on various investment bulletin boards around the web. I spent a little time yesterday reading the comments on a couple of boards, it was almost a running commentary as the share price continued to fall, ending the day a little under 6p, just about half its price of 3 days ago as bulls and bears of the stock slugged it out.

What came across however, was the almost despair of those that were invested in the stock or who had topped up as the price fell. They were catching the proverbial falling knife on a regular basis, only to see it go down further as more sellers came in.

A company RNS was issued on Thursday night regarding the 30%+ fall that happened on that day. it was meant to put a line under events - it didn't.

The Company is aware of recent press speculation regarding the equity swap and an active short position in relation to the Company's ordinary shares. In light of this, the Board wishes to clarify that further to its recently reported record results, the Company has a strong balance sheet and continues to trade profitably with significant traction in the insurance sector.

The Company knows of no valid reason for the recent share price decline. Furthermore, the equity swap asset, which has also been subject to speculation, accounts for a small part of the Group receivables and is not a material contract in relation to the size of the Group.  This was issued as part of the funding for the acquisition of Accident Advice Helpline, announced on 3 December 2012 and was deemed to be the least dilutive funding mechanism at this time. It is not currently being exercised, and the Company believes that the counterparty will continue to not make any material transactions in respect of the Company's ordinary shares unless the share price is at substantially higher levels.

http://www.digitallook.com/news/rns/20886456-2564291/QPP-Clarification_regarding_press_speculation_html

Quindell Portfolio - Incredibly cheap or crash and burn?

Yesterday AIM company Quindell Portfolio announced annual results that you might be forgiven for thinking would set the pulses racing, especially as, at least on paper and at first glance, the fundamentals and future prospects of the company seem to look great. 

Quindell Portfolio´s 2012 revenues and pre-tax profits were 10 times higher than the previous year as the company focused on earnings enhancing acquisitions.

The group, which provides expertise in software, consultancy and technology enabled outsourcing to insurance and telecommunications sectors, reported revenue of £137.6m, a 904% increase compared to £13.7m a year earlier.

Pre-tax profit rose 915% to £41.2m from £41.2m and earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 681% to £52.2m from £6.7m.

During the year, the company kept its emphasis on organic growth and profitable acquisitions in legal, health and claims.

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=2564291&action=news&story_id=20879086

Prior to the announcement the share had been falling slightly, but upon the news it almost fell off a cliff, or at least a small one, from around 13p yesterday to a little under 11p today.

Quindell is one of those penny share type companies that seems to have a huge loyal following if comments on many BB's are anything to go by. However, even though its share price is in the penny share league, it does actually have a market cap of around £440 million, although that seems to fluctuate wildly with every 10% this way or that way move.

Reading on those BB's also suggested that bear raider Evil Knievil, Simon Cawkwell has also bet against it. If so, he has taken on the company itself which seems to be betting the other way. The Times reported that the company itself has £13.3 million in CFD long bets on its books, which some may think is not the way shareholders money should be used, while others might think it shows faith by the management in the company's future. For the moment at least, Quindell is probably losing big time on that bet (Note - read on a BB that this had now been closed although others question this).

Telford Homes - impressive trading update

Because of the reasons given here it is difficult not to be bullish about UK house building stocks and if further proof were needed it came in a trading update from Telford Homes today. Reading through the high points it is difficult to believe that the UK housing market, at least in terms of sales, is going through a bit of a slump, but Telford is London biased. Many housebuilders seem to be reporting good business, something which can only be increased by further Government intervention.

The company reported.

Exceptional levels of demand with contracts exchanged for the sale of 803 open market properties in the year to 31 March 2013 (2012: 460) Strong demand from overseas investors for London property; however over 60 per cent of the exchanges in the year were sold to UK buyers Already 94 per cent pre-sold for the year to 31 March 2014 and over 50 per cent pre-sold for each of the two following years

Significant improvement in both gross and operating margins

Profit before tax for the year to 31 March 2013 will be ahead of market expectations

Net debt reduced significantly to under £35 million (2012: £54.6 million)

 The outlook presented today is about as positive as you could want it.

Outlook

The London property market remains encouraging and the Group's forward sales position, increasing margins, healthy development pipeline and enhanced financial strength are all reasons to look forward to the next few years.

The Board is confident that substantial growth in profit levels can be achieved over the next three years from the existing pipeline and has a long term strategy to further this growth, in London, over the next five to ten years.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11554068

The dividend yield on this one is pretty low and the P/E looks stretched, but you pay for quality like this. Momentum in the share price is also up so things look stretched here as well, but as can be seen on the weekly chart below, a new breakout appears under way.

32Red - Final Results

32Red was first mentioned here when the share price was around 43-44p, since then it has been a steady riser to around 57p on the expectation that it would probably deliver good results in its final report. Well today we got those good results.

Commenting on the results Ed Ware, Chief Executive Officer, said:

"The Company has enjoyed another year of considerable progress thanks to the focus and drive of the 32Red team. Not only have we delivered our third successive year of record results in 2012, but we have also successfully launched the 32Red brand in the newly regulated Italian market. Our strategy of increased investment in marketing is delivering strong levels of new player recruitment.

"This year has started strongly and we are confident of further progress in 2013, both financially and operationally, as we continue to grow the 32Red brand in regulated markets"

http://www.digitallook.com/news/rns/20774871-134513/TTR-Final_Results_html

Certainly looks like a decent growth story in the sector and while the fundamentals now look a little stretched from a few months ago, the added attraction here is that it may eventually attract takeover attention. The numbers still look pretty good though.

The gambling sector is not everyone's idea of a good investment, but for those who don't object on morality grounds, 32Red looks a good bet. As always DYOR.

Update:

Just read that Naked Trader Robbie Burns is a fan of this company, he mentions it in his latest update and also talks about how nice it would be if only it could be put into an ISA. As an AIM stock the Government is still in consultation mode on this change and yesterday's budget made no reference to anything happening this year.

For example just recently as those who came to the last two seminars know I was keen on 32 Red (TTR) - results are good but mainly I would hope there is a good chance of it getting bought out by one of the main bookmakers.

I bought them up mainly for my pension as AIM stocks are allowed in there and got a nice lot at 41 and at 45, and a few more last week.

However as they aren't very liquid IG wouldn't let me have many although lucky for me spreadex did and I built a nice stake with them.

But.. if I could have put them in an ISA I would already be in a very nice tax free profit. So just one example this new freedom to put AIM into ISAs will give me. It reports tomorrow and it could be a down day on a sell on the news thing but I'd be tempted to buy more on any weakness.

http://www.nakedtrader.co.uk/