OMG! Tuesday 19 October: 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 Braemar Shipping Services and Croma Security Solutions. Read about these Opportunities 4 Material Gains!

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Mid-week Tip

Braemar Shipping Services (LSE: BSM)  248.5p . It is a shipbroker and provider of other services to the shipping sector and  increasing shipping costs are helping to contribute to inflation, but are good news for BSM. It has already confirmed that its first half trading was strong. Braemar is adding to the services it can offer clients and hopes to build its presence in the US and grow the European offices. The Cory Brothers logistics subsidiary is planning a joint venture with Vertom Agencies, which means that Braemar will receive a minority stake in a much larger European business. This deal should be finalised before February 2022, and it means that Braemar can focus on its core businesses. All three divisions should perform better this year and  finnCap, the broker,  forecasts a recovery in pre-tax profit from £9.9m to £11.3m this year giving a prospective P/E of 11x The dividend  could be raised from 5p a share to 5.7p a share, providing a 2.2% yield. Profit and dividend are expected to continue to grow. Buy to take advantage of the upturn in the shipping industry.

 

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Croma Security Solutions (LSE: CSSG) 89.5p  provide security solutions and the last Trading update reported that all divisions are trading robustly as demand for its range of security services was reported to have increased across all areas.   The figures were upgraded, and we are anticipating June’s finals will show around 10% increase in EBITDA to £2m against £1.75m, on revenues of £34m, which is a strong fight back from Covid restraints. he interim PBT was £388k for an EPS of 2.6p if its only doubled for the full year an EPS of 5.2p giving a prospective P/E of 17x. Its contracted revenues represent approximately 84% of income, ensuring a good visibility over the reliability of organic growth. On an  EBITDA/ Enterprise Value, the  valuation is however a  lowly  5x. A full year dividend is likely to be paid, the NAV is £11.8m with cash of £3.9m so there are sufficient funds to support opportunistic acquisitions. Finals Monday 25th Oct

 

Reviews

AGM – 25.5p- Long Tunnel

NWT- 0.85p-  Houdini need

BMS – 262p – Profit upgrade

SEE – 10p – Shell framework

IOF – 15.8p – Third quarter iodine production

LUCE – 345p – DW Windsor acquisition

DNL – 60.5p – New European distributor

RLE – 40p – 31% discount to NAV

FDBK – 0.8p – Teleradiology deal

 

Director deals – EAAS / CRU / JSG / VANL

 

Finally : 

Markets currently seem sanguine with the theory of balancing lower growth against the corrosion of higher inflation. The Spending Review to be reported on the Wednesday 27th October needs to put the theory into policies.

 

OMG!  Opportunity for Massive Gains is a Premium Newsletter on ADVFN with two reports each week written by experienced small cap specialists. To get trips like this every week, sign up here.

 

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