Check out this week's most popular equity research
Companies: ACRL, CLIG, G4M, NUM, 0OJU, TILS
In our first week back, we've got two great reports from N+1 Singer and Panmure on some of their top picks for the upcoming year and quarter respectively. Other reports worth highlighting include coverage of G4M's forecast increase by Edison and Panmure.
Investment Ideas | N+1 Singer, 4 January
"Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield..."
Investment Ideas | Panmure Gordon, 5 January
"Since its inception in 2010, the Conviction List has outperformed the market in 11 of 19 periods and a reinvested Conviction List would have returned 260% against a Small Companies index that would have returned 194%. Our Conviction List returned 0.4% over the last quarter; this was set against the benchmark UK Small Companies index that returned 4.0% over the same period..."
FY17 PBT raised 20%; Investing for growth leaves FY18-19 unchanged
Gear 4 Music Holdings Ltd (G4M) | Panmure Gordon, 6 January
"Today’s very strong trading statement shows continued excellent sales momentum (+55% for Sept-Dec) and a boosted gross margin, attesting to G4M’s delivery against its stated strategic objective to grow European market share and marginrich Own-label offering. This prompts us to raise our FY17 PBT estimates by +20% (following on from the +21% increase in October 2016). The company ethos of investing in infrastructure ahead of future growth leads us to believe that operational gearing will come through further as the international business grows over the medium-term..."
Starting in a new addressable market
Sky Plc (SKY) | AlphaValue, 6 January
"Sky officially launched yesterday its new mobile service in the UK, in a market currently valued at £15.2bn. Considering that current “mobile contracts are inflexible and confusing” and that most people “are buying more data than they need to avoid extra charges”, the group is offering “flexibility and value”. Note that customers’ unused data “will be theirs to keep” (to use whenever they need for up to three years), with the possibility, month to month, of creating their own appropriate plan. Sky TV customers (who are the main target of this new service) will also get free UK calls and texts as well as synching with their Sky+ box..."
SMMT (Society of Motor Manufacturers and Traders) 2016 data
Sector Note | Zeus Capital, 5 January
"The SMMT (Society of Motor Manufacturers and Traders) has released data this morning confirming a record new car market of 2.69m registrations and +2.3% YOY. This is the fifth year in a row of growing new car registrations. Headline December registrations were -1.1% with private registrations -5.5% completing a third quarter in succession of negative growth in this segment. Fleet continues to drive the growth in this market and was +4.8% YOY representing 51.3% of registrations vs. 50.0% last year. The key question is what will happen in 2017 post Brexit with uncertainty levels still high..."
Market share gains and margin boost
Gear 4 Music Holdings Ltd (G4M) | Edison, 6 January
"Gear4music’s (G4M) Christmas trading statement shows it continuing to take share in its niche markets to generate revenue growth far above the level of general consumer demand. We expect the company to over-achieve our margin expectation, and upgrade our FY17e earnings per share forecast by 20%, although we expect margins to normalise in FY18. While the share price has risen by a factor of four since we initiated in May 2016, it still stands at a discount to larger UK pure-play e-tail peers..."
Gearing up for a strong second half
Accrol Group Holdings Plc (ACRL) | Equity Development, 4 January
"Stand-outs from a strong first half include an increased share of the discount sector (c 50% in H1 16/17), the best performing segment of Accrol’s target market, and impressively higher gross margins y-o-y despite adverse forex shifts triggered by the EU referendum. The latter reflects effective currency hedges, but just as important, the flexible way in which Accrol sources raw materials. We see this as a differentiator and source of genuine competitive advantage.Gear4music’s (G4M) Christmas trading statement shows it continuing to take share in its niche markets to generate revenue growth far above the level..."
City of London Investment Group (CLIG) | Hardman & Co, 6 January
"After three positive quarters for emerging markets, the fourth quarter of 2016 has been disappointing with the MSCI Emerging Markets Index falling 5%. The big reasons behind this move are fairly clear – the attitude of Donald Trump towards many emerging market countries, particularly China and Mexico, suggests relationships may deteriorate. His attitude towards trade deals in particular may have a wide impact, though as often the reality is likely to fall short of the rhetoric. A rise in US interest rates, with the prospect of more to come, may have a shortterm impact on capital flows too..."
Growing in uncertain market conditions
Numis Corp (NUM) | Edison, 4 January
"Equity indices have shown resilience but FY16 did not provide an easy backdrop for Numis’s corporate activities, so delivery of revenue growth of 15% was encouraging and demonstrates further the benefit of the continued growth in the franchise. The corporate client count now stands at 199, compared with 130 in 2010, and with potential to broaden its areas of sectoral strength and develop services offered to private companies, there appear to be many opportunities to focus on..."
Tiziana Life Sciences (TILS) | Beaufort Securities, 4 January
"Tiziana has expanded its therapeutic pipeline in key immunological areas by acquiring NI-1201. This follows in-licensing of foralumab (NI-0401), a clinical, fully human engineered oral anti-CD3 mAb, also from Novimmune, back in December 2014. The Group believes that NI-1201's unique mechanism, has the potential to considerably increase anti-inflammatory activity as well as complementing its program on foralumab. Until recently it has been generally accepted that despite the convenience and appeal of oral therapies..."
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