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Royal Mail IPO – the wrong kind of encouragement

There was a very intelligent letter in the FT today from a Dr Alex May. To quote: “I fear the sale will distort public perception of investing in shares”. It went on to suggest that it would mislead people into believing that making money in shares was easy, and implied it would encourage speculation rather than sound investment in a portfolio of shares. Even more astonishing was the revelation on the front page that some investment banks valued it at nearer the ...

Renishaw Profit Warning

No sooner had I completed an article for the latest ShareSoc newsletter on the wisdom of fund manager Harry Nimmo, with whom I had discussed Renishaw at the Standard Life UK Smaller Companies AGM, than moments later the former company issued a profit warning. Yes Renishaw issued an Interim Management Statement this morning which indicated revenue for the 3 months ending 30th September would be down from £92.2m to £75.2m compared with the prior year. The Far East, specifically China, was particularly ...

Royal Mail flotation – private investors losing out both ways

Some ShareSoc members are very disappointed that they will not get any shares in the Royal Mail flotation because they subscribed for more then £10,000 worth. These are my personal comments: This seems to be discrimination against the moderately wealthy and those who just happened to have some spare cash in the bank.  Either everyone should have got the same allocation of £750 of shares, or there should have been a graduated scaling back. It's just illogical. What is being done is that ...

Abbey Protection – a lowball bid offer

  Abbey Protection (ABB) is an AIM listed insurance company with a current market cap of £115m. The shares have traded between 116p to 122p in the last two months, with a reasonable volume for an AIM company. But yesterday the directors announced a recommended cash offer of 115p per share for the company from Markel Corporation. This is a very unusual situation because usually there is a “bid premium” for control of a company. The market price was presumably what willing buyers ...

How to pick small cap stocks – just follow Harry Nimmo

Yesterday was the Annual General Meeting of Standard Life UK Smaller Companies Trust and those who like investing in small cap stocks would have found it useful to go along and learn from the master – fund manager Harry Nimmo. Gordon Humphries said that the company is basically “Harry’s 50 best ideas”, i.e. it’s a conviction portfolio but with no individual holdings allowed to go above 5%. It has a fairly low yield at 1.4% currently but that has grown at a ...