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Monthly Archives: October 2014

How About Some Market Perspective..?

17 Friday Oct 2014

Posted by Wexboy in Uncategorized

≈ 5 Comments

Tags

bear market, business media, compounders, de-leveraging, fear and greed, growth investing, hindsight, investment checklists, over-confidence, value investing

Go on, admit it…at this very moment, you’re glancing at a business anchor who’s busy losing their mind on your telly. Yes, left, right & centre – lots of markets are correcting. Or should I say collapsing, tanking, plummeting, nose-diving, slumping, free-falling, or simply never ever recovering ever..! And if you can look past the hyperbole, some are unfortunately entering actual bear market territory. Kinda gets the blood pumping, eh? You really should switch off the TV, and just go meditate (or run a marathon) instead! It definitely could save you a few quid & a few stupid decisions. But we’re all too human – and now we’re addicted to this 24/7 diet of escalated corporate & market drama, so it’s become easier than ever for the media to stoke fear (and greed) in our hearts.

Traditionally, a 10% market reversal was defined as a correction, while a bear market was at least a 20% decline. But now the business media’s upped the ante, unilaterally adopting something like 3% & 10% as the new thresholds (respectively). [And I suspect politicians & central banks aren’t far behind]. Look at them now – glued to their desks, fuelled on Red Bull, and kitted out with adult diapers (think about it…live TV, energy drinks & too much excitement?!), they can barely contain their glee at this renewed market turmoil. Which is, of course, sheer madness…

But here we are, lapping it up – feeling so very serious about the market yet again. Because a reversal invariably hits us out of the blue, with the reasons why only trailing after, in its wake… [How many talking heads highlighted a global growth slow-down two months ago?! But now it’s the glib explanation you’re hearing on every business channel]. I mean, we began September with so much promise?! Personally (& somewhat counter-intuitively), I was fairly bullish myself – and I still think I read the charts correctly as being quite promising (though I definitely wasn’t keen on a 2,000+ S&P). Unfortunately, the price action & the charts never quite followed through, and now September & October are living up to their more usual grim reputation.

So, what am I going to tell you here..?

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TGISVP – An Updated Snapshot

13 Monday Oct 2014

Posted by Wexboy in Uncategorized

≈ 13 Comments

Tags

Donegal Investment Group, Fyffes, Irish shares, Irish Stock Exchange, Irish value investing, ISEQ, NTR, Petroneft Resources, Prime Active Capital, TGISVP, The Great Irish Share Valuation Project, Zamano

Unfortunately, after starting with such promise, the months of September & October now appear to be living up to their more usual fearsome reputation. At this point, we’re forced to commiserate over a 10% correction (in round numbers) for the ISEQ from its most recent (early-Sep) high, including a 6.3% fall last week. And the fact the index is down almost 14% from its (end-Feb) 2014 high just compounds the misery. But corrections also present a good opportunity to re-evaluate battle plans… Now, I’ll obviously be reviewing The Great Irish Valuation Project in greater detail at year-end, so I’m going to strictly limit my comments here.

Updated snapshots of this year’s top winners & losers might prove instructive… [NB: Each stock’s gain/loss is simply measured from its TGISVP evaluation date (i.e. Feb-May, except for NTR), so actual YTD performance rankings of stocks might look a little different]. First we have the Sewer Shit:

TGISVP Oct Losers

Maybe it’s worth picking through the rubble for a couple of bargains? Hmm, perhaps not – with a couple of notable exceptions, all I see here really are bombs that may still explode in one’s face. As for ‘investors’ who already own some of these stocks, what can I say…if they’re stupid enough to buy ’em in the first place, I’m surely not the person who’s going to persuade them to finally cut their losses & run!

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Newmark Security…A Real Steal!

04 Saturday Oct 2014

Posted by Wexboy in Uncategorized

≈ 6 Comments

Tags

activist investor, Alexander Reid, catalyst, family firms, Marie-Claire Dwek, Maurice Dwek, Newmark Security, NWT, share buyback

[First, I should give a hat-tip to Universe Group (UNG:LN) – my first write-up, and this recent post particularly, may prove quite relevant here. Despite a significant retracement in the past year, UNG’s delivered a 125%+ return in the past two years, and I believe it continues to offer substantial upside potential. Which inspired me to seek out & research a number of other (relatively) similar companies…]

…And I came across Newmark Security (NWT:LN), which has been AIM-listed since 1997. Newmark’s a leading provider of electronic and physical security systems to ensure the safety & security of company personnel and assets. It has two divisions, consolidated around two companies which have been in business since the ’80s: The Electronic division (Grosvenor Technology, acquired 2002) – design, manufacture & distribution of access control and workforce management systems, and the Asset Protection division (Safetell, acquired 2000) – design, manufacture, installation & maintenance of bullet/attack-resistant screens (doors, walls, etc.) and cash management systems.

At first glance, a GBP 19 million revenue/9 million market cap company looks like a real tiddler in the security industry. But a client list (see here & here) which includes the Post Office, Tesco, Broadgate Estates, Network Rail, and the Met, plus relationships with Assa Abloy (ASSAB:SS) & Loomis (LOOMB:SS), all demonstrate Newmark punches well above its weight. And despite selling an OEM product range via value-added resellers & installation companies, an impressive 42%+ gross margin also attests to the quality of the company’s products, service & relationships (and the profitability of its niche). But why don’t we let the numbers do the talking…

I’ll tackle this in two stages, beginning with the six year period ending in 2012. [Note the April year-end – e.g. FY-2012 is the financial year ending Apr-2012. btw To highlight I’m not cherry-picking here, 2005-06 revenue averaged GBP 12.9 million (i.e. similar to the subsequent 6 yrs)]:

Newmark Fins 2007-12

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