News & Blogs

Stockwatch: UK small-caps are tasty takeover targets

An occasional if persistent bugbear in small-cap investing especially is agreed takeovers happening when stock prices are out of favour and the business is doing pretty well.

Hardened investors are realistic to know it happens, and they move on, taking heart that at least equities may be at a discount to fair value more widely.

Right now, and despite recession risks, small-cap fund managers argue the sector has been through a big de-rating since expectations shifted from September 2021 towards interest rates rising. Despite the index improving gradually in the last six months, managers say it is exceptionally low in a long-term context, hence there are buying opportunities.

Terms of 110p a share value Finsbury at 143 million relative to highs of 115p as long ago as 2007 and 131p in September 2016, with no material dilution along the way. The Covid-related market sell-off was responsible for a low near 50p in October 2020.

The table shows modest mid-single-digit operating margins to be expected when supplying supermarkets although a mere 0.1% slip this last financial year to 4.2% versus inflation is commendable. Return on total capital entertains double digits.

Finsburys dilemma is not meeting investor expectations for exciting prospects, hence the stock being rated modestly. DBAY hopes to enliven prospects with strategic transformational takeovers and makes a specific accusation about how a stock listing compromises growth by acquisition.

Sep 28, 2023

The Global 100 Award makes it a hat-trick of awards this year for the London Academy of Trading

The London Academy of Trading (LAT), the UK's first accredited trading academy, has won its third award this year with the "Most Outstanding Trading Courses Provider - 2022" from The Global 100.

With its global readership of more than 293,000, The Global 100 does not follow the usual process of many publishers, but a very specific, comprehensive evaluation process. After the closure of the voting period, which involves a strict format of self-submission and third-party nomination, firms are shortlisted and then the winners are selected. For each category, a propriety method of analysis ranks winners based on their domestic and international work.

Judges of the Global 100 looked at the scale, nature and strategic complexity of the work conducted by the participants as well as whether they were quick, within budget, used ground-breaking or innovative processes and focused strongly on the complexity and strategic significance of the work conducted.

LAT is very flexible, allowing students to study around other commitments, offering monthly intakes and options to study online, on campus or a blended combination of both. The faculty is composed of experienced traders and analysts from institutions including HSBC, Bank of America and Bloomberg who all trade live accounts and are available to students 10 hours a day to provide help and advice.

Sep 28, 2023

CFD trading - What are Contracts for Differences (CFDs), and how do they work?

Today, individuals have more choices than ever before when making investment decisions. Although normal market trading via a financial institution or brokerage firm remains a typical model, it is becoming more prevalent for individuals to explore other avenues. CFD trading is one such technique that has gained popularity since it puts people in control of their investment decisions and it enables trading in many different financial assets.

What is CFD Trading?

In contrast to stocks, bonds and other financial instruments where traders or investors physically own the assets, Contract for Differences (CFD) trading does not entail the ownership of any assets. Instead, they involve whats called margin trading, using units that are connected to the price of a specific asset based on the security's market value.

Well, how does a CFD work? Overall, a CFD is essentially the right to speculate on a security's price fluctuations without having to own the asset itself. This type of investment is defined by its name: a contract intended to benefit from the difference in the security price between the contract's opening and closing dates.

IS CFD Trading Right for Me?

Here are some indications that CFD Trading might be a good investment choice for you:

  • If you want to speculate in the price fluctuations of financial assets as opposed to acquiring tangible assets.
  • To capitalise on short-term movements in the underlying instrument or security. This is favoured by traders/investors seeking to benefit from intraday and overnight market swings.
  • To make use of leverage and diversify cash across a variety of securities as opposed to placing it in a just a few investments. (Note: using leverage can increase risk)
Sep 28, 2023