Diary of a Private Investor

Update and Review – IOF, CLIG, SRT, PHP, PEG, NXR

There has been quite a lot of activity this week among my portfolio holdings.

Iofina (IOF.L)
The story of the week in my portfolio is Iofina (IOF) where a regular quarterly update reiterating the same numbers as three months before has led to a near trebling of the share price from a week ago – go figure! In fairness, the market seems to have been spooked by the tightened regulation of the fracking industry in Oklahoma which in the event, seems not to have negatively affected IOF’s iodine production and as a result, traders and investors have returned in their droves, many of whom have swiftly exited in the second half of the week. Alas, it seems that IOF remains destined to be a traders’ share which means volatility will be forever present.

City of London Investment Group (CLIG.L)
An interim management statement this week confirmed funds under management had risen from $3.8bn at the end of December to $3.9bn three months later and moreover, provides some confidence that the final dividend will be maintained  when final results are announced on 18th July. This said, the share price softened some 5% which is largely irrelevant for me as I am building up my income portfolio over time.

Software Radio Technology (SRT.L)
A year end trading update this week confirmed the company expects to report revenue of £10.6m (up 24%) and pre-tax profit of £200k. Moreover, the company confirmed it has a £70m forward order book and a validated sales pipeline of over £200m – bring it on!

Primary Health Properties (PHP.L)
The placing and open offer closed this week, raising £150m instead of the £120m targeted. This bodes well for continued steady growth.

Petards (PEG.L)
PEG, which readers will recall I bought purely as a punt on the super cheap metrics, announced an acquisition this week and it seems to be an outstanding piece of business. The company being acquired is QRO Solutions for a cash consideration of £1.255m which includes an earn-out clause (£140k) that is conditional upon QRO delivering £240k profit this year. Acquisitions that are immediately earnings enhancing are always appealing and it is interesting that the QRO balance sheet as at 30 November 2015 had net assets of £683k and cash balances of £876k. This seems like a great piece of business by PEG, especially if they can open up new international markets for QRO’s product range. This is now becoming a very interesting play and seems very cheap based on 2016 earnings which are marginally ahead in the first quarter of 2016.

Norcros (NXR.L)
NXR provided a trading update following their year-end on 31 March and it is good to know that operating profit for the year is likely to be marginally ahead of market expectations. The company also advised that they have agreed a 10 year plan for pension deficit reduction which does not seem too demanding. The acquisition of Croydex appears to have been “seamlessly integrated” and the acquisition of Abode in March 2016 will be “immediately earnings enhancing”.

Disclosure – I hold long positions in IOF, CLIG, SRT, PHP, PEG and NXR


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