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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring Lombard Risk, Medica, Paysafe and Reabold Resources.

by David Campbell on Oct 09, 2017 at 05:00

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Key stats
Market capitalisation£43m
No. of shares out401m
No. of shares floating247m
No. of common shareholdersnot stated
No. of employees380
Trading volume (10 day avg.)1m
Turnover£34m
Profit before tax£-1m
Earnings per share-0.18p
Cashflow per share0.88p
Cash per share1.75p

Lombard Risk

Citywire A-rated value specialist Alex Wright has sold down his stake in outsourced risk management business Lombard Risk (LRM) as a recent rally peters out, to trade essentially flat over the last 18 months.

Wright cut his investment in the company from 7.6% of shares worth £2.7 million at a share price of 10p, to below a reportable level.

The shares were previously held in his £421 million Fidelity UK Smaller Companies fund.

Trading in Lombard has been highly volatile with the stock trading as low a 6p following Brexit to as high as 15p six months ago, but has effectively ended where it stood in the first quarter of last year.

Broker N+1 Singer initiated coverage last month with a ‘buy’ rating and a 16p price target.

Lombard, which provides balance sheet risk management services to banks, reported a £190,000 loss in the year to April, from a loss of £167,282 in the prior year, as it paid down debt.

Key stats
Market capitalisation£232m
No. of shares out111m
No. of shares floating102m
No. of common shareholdersnot stated
No. of employees81
Trading volume (10 day avg.)1m
Turnover£29m
Profit before tax£3m
Earnings per share3.32p
Cashflow per share5.33p
Cash per share4.24p

Medica Group

Citywire AAA-rated small cap veteran Dan Nickols has upped his stake in private radiologist Medica Group (MGPM) as its shares have dropped back close to where they entered trading in March this year.

Nickols increased his holding to just above 14% of the company worth £31.2 million at a share price of 200p, down from a peak of 236p in June.

The shares are primarily held in his £1.2 billion Old Mutual UK Smaller Companies fund, one of the largest holders of the stock, with a smaller position in the company’s Smaller Companies Focus fund.

Investors last month marked Medica down 6% in a single day of trading, despite the company reporting pre-tax profits 42% higher in its first set of results as a public company, at £3.8 million.

The company remains valued for aggressive growth, at a share price 60 times last year’s earnings. Berenberg initiated coverage in August on a ‘buy’ recommendation and a 260p price target.

Key stats
Market capitalisation£2,851m
No. of shares out489m
No. of shares floating476m
No. of common shareholdersnot stated
No. of employees2116
Trading volume (10 day avg.)5m
Turnover763m USD
Profit before tax108m USD
Earnings per share0.21 USD
Cashflow per share0.34 USD
Cash per share0.42 USD

Paysafe Group

Citywire A-rated global growth investor Bill Bower has booked some profit on his stake in online payment processing business Paysafe Group (PAYS) as a takeover premium begins to weaken.

Bower reduced his holding to 7.3% of the business worth £205 million at a share price of 581p, up more than 10-fold from 52p over the last five years.

The shares are primarily held in his US-based $19.9 billion (£15 billion) Fidelity Diversified International fund, with a smaller stake in sister fun Fidelity International Discovery.

Shares in Paysafe rocketed 15% to 595p this summer after the company confirmed a 590p-per-share offer for the FTSE 250 business by private equity giants CVC and Blackstone.

The £3 billion deal was nodded through by shareholders on the narrowest of margins last week, with a 24% revolt by equity owners leaving management barely scraping the 75% of votes needed.

Key stats
Market capitalisation£8m
No. of shares out1,188m
No. of shares floating826m
No. of common shareholdersnot stated
No. of employees0
Trading volume (10 day avg.)23m
Turnover£m
Profit before tax£m
Earnings per share-0.04p
Cashflow per share-9,999,999.00p
Cash per share0.11p

Reabold Resources

Small cap stock picker Gervais Williams has taken a chunky 10% stake in mining investment business Reabold Resources (RBDR) via a private share placing, as the company re-orientates its portfolio strategy.

Williams took up a stake worth just over £850,000 million at a price of 0.72p, sharply up from a low of 0.32p earlier this month, before a surge in demand for a capital raising.

He holds the stake in his £107 million Miton UK MicroCap trust, which he manages alongside Martin Turner.

Shares in Reabold Resources remain 71% lower over the last three years. The company began to climb this month after it reported greater than expected demand for a near £4 million placing to support a ‘more focused’ investment strategy, concentrating on European oil and gas projects.

That followed the company’s proposed recruitment of former M&G investment analysts Sachin Oza and Stephen Williams, currently consultants to the group, as executive directors of the firm.

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  • Reabold Resources PLC (RBDR.L)
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  • Paysafe Group PLC (PAYS.L)
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  • Medica Group PLC (MGPM.L)
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  • Lombard Risk Management PLC (LRM.L)
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