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Published on Stockopedia here, on 8 Jan 2023As with all our stuff, this is NOT advice, it's just Paul's personal opinions, based on the facts & figures at the time, which will change in future. Always do your own research. Some of these ideas will work, some of them won't - that is normal, and to be expected! I am NOT a guru!!
Average
My list average since 1/1/2023Benchmark: AIM All Share since 1/1/2023Paul's list out-performance vs AIM
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Paul's 2023 small caps watchlist
Stockopedia stats at 6/1/2023#N/A#N/A-8.9%#N/A
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ThemeMarketTickerNameSectorMkt CapStockopedia StyleStockRankBalance Sheet riskInvesting rationaleMid-price at 6 Jan 2023 start (pence)Live price nowPrice change since 6 Jan 2023Mid-price at start of 2023Price change YTD757.3AXX
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ValueAIMLON:RNORenoldIndustrial chains & similar51Neutral79OK, but big recent acquisition increased debt a lot.Very resilient business in downturns, as lots of repeating business.Good H1 results & outlook. Big pension deficit though. Review here Nov 2022.22.581.8264%21.4282%
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GARPFullLON:GDWNGoodwinEngineering285Neutral66Looks OK to me.Big increase in order book - seems to have some interesting growth & projects in the pipeline. Decent recent interims & solid outlook.370022994.95521%3335590%
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ValueAIMLON:ROLRotalaBus operator19Super Stock97Now low risk, due to large recent property disposal.Key development, reviewed here on 28 Dec 2022, major property disposal leaves cash pile similar to mkt cap. Illiquid special situation.3863.567%3581%Takeover approach from mgt 19/9/2023
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ValueSMXXLON:WINWincantonLogistics412Super Stock84Weak balance sheet, but it doesn't seem to be causing any problems. Pension scheme sounds close to being fully funded, which could trigger a re-rating of the shares.Seems to be a very well run company, retaining & winning big contracts. Valuation looks too cheap, and could re-rate once pension scheme fully funded.33160583%33780%Profit warning in March over loss of major contract19/1/2024 - Recommended takeover at 450p! 29/2/2024 - wow,new bidder offers 605p cash!
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Value/GARPAIMLON:BLVBelvoirReidential lettings (franchised) & mortgage arranging, surveys, etc70Neutral79Bal Sht isn't great, but that's not a concern due to reliable recurring revenues.Good business & management at a very reasonable price (PER only 9). Divi yield 5%. Might be some temporary pain in 2023 re slow mortgages market.189411.25118%194.5111%Lettings holding up well. Aug 2023.Jan 2024 - Takeover/Merger with TPFG - all-share, no premium.
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ValueAIMLON:ANGAngling DirecteCommerce19Contrarian68Low risk - excellent Bal Sht, as 80% of mkt cap is net cash (as of 12 Oct 2022)Recovery potential? Breakeven trading in 2022. Valued at nothing more than its own net cash. eCommerce sector might see recovery in sentiment? Details.2553.15113%25113%
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ValueAIMLON:HSPHargreaves ServicesDiversified group incl engineering services, and property138Neutral52Strong, NTAV above market cap.Very low PER, big divi yield, and strong balance sheet. Details here.42465254%39565%
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ValueSMXXLON:GLEMJ GleesonLow-end housebuilder209Contrarian68Incredibly strong, with net cash. Mkt cap well below NTAV.Whole sector has massively sold off, too much I think. With ultra-low selling prices (avg. c. £170k) I think demand should hold up, after a (temporary?) slowdown in early 2023. Reviewed here358348.44-3%3441%Tough sector for now. Aug 2023.
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ValueAIMLON:BOTBBOTB (previously: Best Of The Best)Online supercar competitions34Contrarian44Strong. Plenty of cash.Low PER, and in line update in Nov 2022. Possible intl expansion via Teddy Sagi's strategic investment. Risk:reward looks really good to me.40553532%40532%TAKEOVER BID AT 535p
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GrowthAIMLON:CERCerillionCloud software for telecos348High Flyer75Very strong Bal Sht, plenty of cash, no issues - low risk.Fantastic organic profit growth in recent years. In a sweet spot, winning more contracts. Looks exceptionally good, but shares are not cheap!1185140018%121016%
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ValueAIMLON:VLXVolexElectrical wiring products413Neutral79Debt has risen a lot with recent acquisitions, but looks manageable.Excellent turnaround, and good acquisitions strategy. Seems to be weathering the macro storm OK so far, but obvious risk of a slowdown in 2023.260376.545%250.550%Encouraging newsflow & reassuring updates. 9/8/2023.
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ValueSMXXLON:WIXWickesDIY stores398Neutral78Healthy, with £167m cash pile (at 2/7/2022). Very healthy once IFRS 16 lease entries are removed.Modest fwd PER, good yield, and solid balance sheet. Could have some short-term softness. Energy fixes expire Mar 2023. S b good long-term I think. Q3 review here.153215.541%146.347%Quite good recent update, looks cheap. Doing big buyback on top of 8% yield. Aug 2023.
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ValueSMXXLON:MACFMacfarlanePackaging manufacture & distribution163Neutral83Adequate.Really good company with excellent long-term track record. Inexplicably cheap. Reviewed here Nov 2022.10367.11-35%104-35%
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GARPSMXXLON:ZTFZotefoamSpecialist lightweight high performance foams171High Flyer83Strong balance sheet, with freeholds. Debt for refurbishing factories set to decline quite quickly. So no concerns here.Trading well (I reviewed Dec 22 ahead exps update here). Decent existing business (wuith pricing power), plus Re-Zorce blue sky project in for free. A long-term hold I think.3523695%3409%Good interim results & mgt seem positive about outlook. 9/8/2023.
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ValueMCXLON:STEMSThreeContract staffing, STEM skills563Super Stock96Very good balance sheet, with net cash.Good quality business, modest valuation. Strong balance sheet. Although demand softening shorter term? Review Dec 2022.419156.8-63%403-61%
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ValueAIMLON:PMPPortmeirionMultiple brands, pottery & kitchen/dining products, candles42Contrarian63Strong. But inventories too big at last interims.Very cheap - low PER, high yield, and mkt cap below NTAV. Obvious worries about energy costs, but hedged until Q1 2024. Reviewed here. Risk of profit warning maybe?303100.81-67%302.5-67%Disappointing profit warning, so all gains given up. Aug '23.Worried about going concern note re reliance on Lloyds - April 2024.
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GARPAIMLON:SDGSanderson Design GroupBranded fabric & wallpaper85Super Stock83Excellent, strong balance sheet.Good turnaround under Lisa Montague. Some uncertainty over short-term outlook, understandably. But should be a good investment longer-term, in my view. Interims review Nov 22.12045.11-62%115.5-61%Another in line update Aug 2023. Licensing doing well, mopping up softness elsewhere. Looks dirt cheap. Aug 2023.
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GrowthAIMLON:SOSSosandarOnline fashion49
Momentum Trap
34Should be fine, as it has enough cash, and is now profitable.Astonishing organic growth, despite consumer slowdown. Heading for £2m profit FY 3/2023, confirmed with interims reviewed here Dec 2022.226.56-70%20.25-68%Another placing! 9% dilution, raising £4m at 22p/share. Not ideal.Soft growth in Q1 reported, but v high LY comp., so growth rate should improve. Lots of initiatives in the pipeline.Profit Warning, 18/10/2023, and major change in strategy. Oh dear.
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ValueAIMLON:WJGWatkin JonesSpecialist property developer, student & build to rent265Contrarian58Low risk, strong balance sheet. Also developments are pre-sold, which greatly reduces risk.Low PER & high divi yield, although I suspect forecasts might need to be further reduced maybe? Should recover over time I think.10328.2-73%100.4-72%Very disappointing, I'm not keen on this one now. Aug 2023. Jan 2024 - FY 9/2023 results not good, but I think there might be recovery potential here. Going concern statement OK.
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ValueAIMLON:QUIZQuizFashion - special occasion wear, shops & online19Super Stock99Excellent, plenty of cash. Very low PER. No problem leases after CVA in 2020. Less competition. Good interims & outlook, reviewed here Dec 2022.15.4#N/A#N/A14.5#N/AWeaker Q1 trading announced. Not looking too good now. But ample BS strength.
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