OMG! Tuesday 5 July: Summary of last week’s newsletter

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The OMG newsletter recommends at least 15 companies each month, using the writers’ experience of small caps to give you a winning edge. Last week they wrote about Synectics and Totally. Read about these Opportunities 4 Material Gains!

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Mid-week Tip Wednesday 29th June

Synectics (AIM: SNX) provides integrated electronic surveillance systems and services to specialist high-end markets and after a rough Covid will be reporting its  interims to May shortly.  Pre-pandemic, its ‘ largest market sector was  gaming and entertainment mainly in  Asia and the States but revenues fell sharply and remain subdued. Costs have since  been cut and the dividend put on hold.

The Synergy platform allows ‘add-on-utility’, such as recording management software and integrated video analytics capability which comprises a large innovative, cloud-based surveillance control system. Allowing the analysis of live video surveillance from hundreds of City-owned and third-party camera sources, including other police services and local transport operators, to deliver a new model for real time incident management. This case-study initiative will transform situational awareness, identifying risk, prioritising threats, and supporting real-time responsive action, across one of the world’s leading financial districts and will receive world-wide attention. The interims due shortly should help trigger a re-rating. Buy at 121p

 

Results Preview 4th June 

Totally (LSE: TLY) TLY provide a range of healthcare services mainly in partnership with the NHS and through its divisions of Urgent Care, Planned Care and Insourcing.  The shares were 31p before its Trading update on 13th April stated that business was substantially ahead of expectations. The finals to March, reported on Tuesday should show an EBITDA* well above last year’s £4.0m where its services were crowded out by Covid priorities.  As its operations of some services, particularly face-to-face, understandably paused, this was compensated by the increased demand for urgent healthcare support responding to increased delivery of COVID-19 Management Services, National Clinical Assessment Services and the ramping up of 111 capacity.  A key contract a specialist business providing insourcing services has been won worth up to £850k. We anticipate significant growth for the insourcing division in the short term.  The Interims to September reported £54.1m Turnover with an 18% Gross Margin with a £2.3m EBITDA although Tuesday is likely to report a jump in revenue, it is slow to trickle down to the profit line. Further acquisitions will need to be funded so a placing can be anticipated.

The shares have had a 266% run from  at last year’s recommendation of 12p and acquisition strategy  while take time to integrate… so take- profits.

 

Reviews from 27th June

Reviews

PRE- 108.5p-  Funded for Growth

AGL – 129.5p – £20m fundraising

ANX – 145p – Disappointing bid approach

NFC – 988p – Upgrading expectations

RUA – 125p – Submission delays

AVCT – 190.1p – Distribution deal

XPD – 75p – Guidance improves

CIZ – 5.63p – Companion diagnostic agreement

SUN – 32.5p – Surgical recovery

 

Finally

Nothing to fear as the FOMC meeting this week likely to add some mild additional economic context as expectations are ‘expertly’ managed for an Interest Rate rise next year.

 

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