Weekly Summary of Research Findings: 12/11/17 – 12/15/17 [PREMIUM]

Below is a weekly summary of our research findings for 12/11/17 through 12/15/17. These summaries give you a quick snapshot of our content the past week so that you can quickly decide what’s relevant to your investing needs. Subscribers: To receive these weekly digests via email, click here to sign up for our mailing list. More

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Exploitability of Deep Value across Asset Classes [PREMIUM]

Is value investing particularly profitable when the price spread between cheap and expensive assets (the value spread) is extremely large (deep value)? In their November 2017 paper entitled “Deep Value”, Clifford Asness, John Liew, Lasse Pedersen and Ashwin Thapar examine how the performance of value investing changes when the value spread is in its largest fifth (quintile). They consider More

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Small Cap Value Report (Fri 15 Dec 2017) – UCG, LUCE

Good morning!
Apologies for the break in service over the past couple of days.
Best,
Graham
(Please note that I hold shares in UCG)
United Carpets (LON:UCG)
Share price: 8.6p (unch.)No.of shares: 81.4 millionMarket cap: &Pound;7 millionHalf-year Report
I thought I might briefly mention this chain of carpet stores as it’s something I’ve held a position in for a while, and it might be relevant to those of you interested in Carpetright (LON:CPR), SCS (LON:SCS) and others in this sector.
The market cap is very small here, only £7 million, and it’s a tiny company, so I’m certainly not suggesting that anybody else should buy shares in it.
Fortunately, the like-for-like revenue performance remained stubbornly resilient, up 2.9%. This is despite overall revenues falling, as the mix of stores became a little bit more heavily weighted towards franchisees rather than corporate-owned stores, compared to a year ago.
It earns a higher return on franchise stores, so that doesn’t bother me at all.
To support its growing online activities and the Beds operations, there was a slight increase in…

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Small Cap Value Report (Fri 15 Dec 2017) – UCG, LUCE

Good morning!
Apologies for the break in service over the past couple of days.
Best,
Graham
(Please note that I hold shares in UCG)
United Carpets (LON:UCG)
Share price: 8.6p (unch.)No.of shares: 81.4 millionMarket cap: &Pound;7 millionHalf-year Report
I thought I might briefly mention this chain of carpet stores as it’s something I’ve held a position in for a while, and it might be relevant to those of you interested in Carpetright (LON:CPR), SCS (LON:SCS) and others in this sector.
The market cap is very small here, only £7 million, and it’s a tiny company, so I’m certainly not suggesting that anybody else should buy shares in it.
Fortunately, the like-for-like revenue performance remained stubbornly resilient, up 2.9%. This is despite overall revenues falling, as the mix of stores became a little bit more heavily weighted towards franchisees rather than corporate-owned stores, compared to a year ago.
It earns a higher return on franchise stores, so that doesn’t bother me at all.
To support its growing online activities and the Beds operations, there was a slight increase in…

Stock Trkr
Small Cap Value Report (Fri 15 Dec 2017) – UCG, LUCE, FUL, BOTB

Good morning!
Apologies for the break in service over the past couple of days.
Best,
Graham

(Please note that I hold shares in UCG)
United Carpets (LON:UCG)
Share price: 8.6p (unch.)No.of shares: 81.4 millionMarket cap: &Pound;7 millionHalf-year Report
I thought I might briefly mention this chain of carpet stores as it’s something I’ve held a position in for a while, and it might be relevant to those of you interested in Carpetright (LON:CPR), SCS (LON:SCS) and others in this sector.
The market cap is very small here, only £7 million, and it’s a tiny company, so I’m certainly not suggesting that anybody else should buy shares in it.
Fortunately, the like-for-like revenue performance remained stubbornly resilient, up 2.9%. This is despite overall revenues falling, as the mix of stores became a little bit more heavily weighted towards franchisees rather than corporate-owned stores, compared to a year ago.
It earns a higher return on franchise stores, so that doesn’t bother me at all.
To support its growing online activities and the Beds operations, there was a slight increase in…

Stock Trkr
Small Cap Value Report (Fri 15 Dec 2017) – UCG, LUCE, FUL, BOTB, CVR

Good morning!
Apologies for the break in service over the past couple of days.
Best,
Graham

(Please note that I hold shares in UCG)
United Carpets (LON:UCG)
Share price: 8.6p (unch.)No.of shares: 81.4 millionMarket cap: &Pound;7 millionHalf-year Report
I thought I might briefly mention this chain of carpet stores as it’s something I’ve held a position in for a while, and it might be relevant to those of you interested in Carpetright (LON:CPR), SCS (LON:SCS) and others in this sector.
The market cap is very small here, only £7 million, and it’s a tiny company, so I’m certainly not suggesting that anybody else should buy shares in it.
Fortunately, the like-for-like revenue performance remained stubbornly resilient, up 2.9%. This is despite overall revenues falling, as the mix of stores became a little bit more heavily weighted towards franchisees rather than corporate-owned stores, compared to a year ago.
It earns a higher return on franchise stores, so that doesn’t bother me at all.
To support its growing online activities and the Beds operations, there was a slight increase in…

Stock Trkr
Underestimating Left-tail Persistence Among Individual Stocks? [PREMIUM]

Do investors underestimate the adverse import of large left tails for future stock returns? In their November 2017 paper entitled “Left-Tail Momentum: Limited Attention of Individual Investors and Expected Equity Returns”, Yigit Atilgan, Turan Bali, Ozgur Demirtas and Doruk Gunaydin investigate the relationship between left-tail risk and next-month returns for U.S. and international stocks. They measure left-tail risk at the More

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Inflation Forecast Update

The Inflation Forecast now incorporates actual total and core Consumer Price Index (CPI) data for November 2017. The actual total (core) inflation rate for November is higher than (slightly higher than) forecasted.

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Emptying the Equity Factor Zoo? [PREMIUM]

As described in “Quantifying Snooping Bias in Published Anomalies”, anomalies published in leading journals offer substantial opportunities for exploitation on a gross basis. What profits are left after accounting for portfolio maintenance costs? In their November 2017 paper entitled “Accounting for the Anomaly Zoo: A Trading Cost Perspective”, Andrew Chen and Mihail Velikov examine the combined More

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SIF Portfolio: Bonmarchamp;eacute; Holdings could be a good look for 2018

My personal share portfolio is divided into two parts. Since earlier this year, one of these parts has loosely mirrored the SIF portfolio. The other part of my portfolio is focused more on value and special situations.
So I was interested to see a stock I’d considered for my value portfolio appear in the SIF screen this week. Womenswear retailer Bonmarché Holdings specialises in “mature” customers at the affordable end of the market. It’s a stock that’s appeared in my own value screens more than once, since running into trouble at the start of 2016.
This company also been covered comprehensively in the small cap value report by sector expert Paul Scott and most recently by Graham Neary.
Like Graham, I’m attracted to the cash-rich balance sheet and the high earnings yield (EBIT/EV) that has resulted from the group’s recovering performance.
Although Bonmarché shares have risen by around 33% from their mid-year lows of c.75p, the stock still boasts a low trailing P/E of 9.2 and a rolling forecast P/E of 7.1. One final temptation is the dividend yield of 7%, which has been maintained and looks increasingly well covered to…

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Small Cap Value Report (Wed 13 Dec 2017) – placeholder

(posted the night before)Good morning! It’s Paul here.It’s going to be a more relaxed writing day today. I’m still reeling, after having to write 6 sections by 10am yesterday, which nearly killed me! I’m 50 next birthday, so maybe it’s time to slow down a bit, on several levels?!As you know, I’m not a morning person. I have a London meeting after lunch. So the plan for today is to write a couple of sections here in the morning, then a couple more sections in the later afternoon/evening.Hope that’s OK. Best wishes, Paul.

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Quantifying Snooping Bias in Published Anomalies [PREMIUM]

Is data snooping bias a material issue for cross-sectional stock return anomalies published in leading journals?In the September 2017 update of their paper entitled “Publication Bias and the Cross-Section of Stock Returns”, Andrew Chen and Tom Zimmermann: (1) develop an estimator for anomaly data snooping bias based on noisiness of associated returns; (2) apply it to replications of More

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[VIDEO] Ask Me Anything with Paul Scott amp;amp; Graham Neary

Thanks to everyone that submitted their questions for Paul and Graham last month. You’ll have no doubt seen Ben’s extensive interview with them, where they go into great depth on broader subjects such as their investing styles, experience and habits. F…

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Small Cap Value Report (Tue 12 Dec 2017) – placeholder

(posted the previous evening)
Good morning, it’s Paul here. This is the usual placeholder article for your comments from 7am on Tuesday morning. I have to head into London late morning, so this report will be earlier, and a bit briefer than usual.

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Small Cap Value Report (Tue 12 Dec 2017) – DRV, SVCA, BEG, PRES, JOUL, ZYT

Good morning, it’s Paul here.
I have to head into London late morning, so this report will be earlier, and a bit briefer than usual. The results/updates that I intend covering are in the article header.
Driver (LON:DRV)
Share price: 63.5p (pre market open)No. shares: 53.9mMarket cap: &Pound;34.2m
Final results
Driver Group PLC (AIM: DRV), the global professional services consultancy to construction and engineering industries, is pleased to announce its results for the financial year ended 30 September 2017.
This looks like a nice turnaround situation, which has been reflected in a recovering share price (up nearly 50% from its 2017 low in the spring). The highlights look good;

That’s a decent swing back into profitability.
I also like that net debt has been almost eliminated, mainly from an £8.5m equity raise in Feb 2017.
Underlying EPS for continuing operations was 5.8p (2016: loss of 1.0p). Assuming that they are calculated on the same basis, that looks well ahead of the 4.2p broker consensus shown on the StockRank.
However, an important point to note is that the share count rose considerably about half way through the year, due…

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Stockopedia Subscriber Performance Survey 2017

On Friday I asked Stockopedia subscribers a set of questions about their stock market performance in 2017. We’ve had a great response so far with 1,168 respondents and more coming in every hour. If you missed the invite, please do check your email inbox and submit your answers. We’ll be keeping the survey open for the next few days, but the results have stabilised and we have a great sample, so I’ve decided to publish the results.

The insights from the survey are exciting and fascinating in equal measure – here goes.
Since subscribing to Stockopedia has your performance outperformed, matched or underperformed the market?

Many subscribers have been with us since 2012 so we started the survey with a more general question about longer term performance. Almost three quarters of subscribers have been outperforming the market since subscribing, and only 6% underperforming.
Those who have been underperforming may be able to learn from the outperformers – so I hope they’ll share their secrets.  I’ll be following up to ask how the best performers have been achieving their results… I’m sure many can learn from their processes.
What has your 2017 performance been as a percentage…

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SACEVS with Margin [PREMIUM]

Is leveraging with margin a good way to boost the performance of the”Simple Asset Class ETF Value Strategy” (SACEVS)? SACEVS each month allocates funds to one or more of the following three asset class exchange-traded funds (ETF), plus cash, based on relative valuations: 3-month Treasury bills (Cash) iShares 20+ Year Treasury Bond (TLT) iShares iBoxx $ More

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Small Cap Value Report (Mon 11 Dec 2017) – SOS, OnTheMarket, PHTM

Good morning,
Thanks for the comments, I’m planning to cover at least the following:
Sosandar (LON:SOS)On The Market (new float)Photo-Me International (LON:PHTM)Hollywood Bowl (LON:BOWL)Will then assess what to cover after that, possibly Marlowe (LON:MRL).
Best,
Graham

Sosandar (LON:SOS)
Share price: 18.4p (-3%)No. of shares: 107 millionMarket cap: &Pound;20 millionTrading Update
This is an online womenswear brand which recently (last month) reversed into a shell on AIM. Adam Reynolds, who has been involved in similar deals to bring shells back to life, was Chair of the shell prior to the deal.
There are some great comments on this in the thread below, including one by Paul. So on the basis that Stockopedia is a “hive mind” of sorts, producing far more intelligence than any one individual could ever produce, I strongly recommend that you check out the comment thread!
Today’s update is brief:
Sosandar plc (AIM: SOS.L), the online women’s fashion retailer, is pleased to announce that trading since 31 August 2017 to the end of…

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Small Cap Value Report (Mon 11 Dec 2017) – SOS, OnTheMarket, PHTM, BOWL

Good morning,
Thanks for the comments, I’m planning to cover at least the following:
Sosandar (LON:SOS)On The Market (new float)Photo-Me International (LON:PHTM)Hollywood Bowl (LON:BOWL)Will then assess what to cover after that, possibly Marlowe (LON:MRL).
Best,
Graham

Sosandar (LON:SOS)
Share price: 18.4p (-3%)No. of shares: 107 millionMarket cap: &Pound;20 millionTrading Update
This is an online womenswear brand which recently (last month) reversed into a shell on AIM. Adam Reynolds, who has been involved in similar deals to bring shells back to life, was Chair of the shell prior to the deal.
There are some great comments on this in the thread below, including one by Paul. So on the basis that Stockopedia is a “hive mind” of sorts, producing far more intelligence than any one individual could ever produce, I strongly recommend that you check out the comment thread!
Today’s update is brief:
Sosandar plc (AIM: SOS.L), the online women’s fashion retailer, is pleased to announce that trading since 31 August 2017 to the end of…

Stock Trkr
Small Cap Value Report (Mon 11 Dec 2017) – SOS, OnTheMarket, PHTM, BOWL, MRL

Good morning,
Thanks for the comments, I’m planning to cover at least the following:
Sosandar (LON:SOS)On The Market (new float)Photo-Me International (LON:PHTM)Hollywood Bowl (LON:BOWL)Will then assess what to cover after that, possibly Marlowe (LON:MRL).
Best,
Graham

Sosandar (LON:SOS)
Share price: 18.4p (-3%)No. of shares: 107 millionMarket cap: &Pound;20 millionTrading Update
This is an online womenswear brand which recently (last month) reversed into a shell on AIM. Adam Reynolds, who has been involved in similar deals to bring shells back to life, was Chair of the shell prior to the deal.
There are some great comments on this in the thread below, including one by Paul. So on the basis that Stockopedia is a “hive mind” of sorts, producing far more intelligence than any one individual could ever produce, I strongly recommend that you check out the comment thread!
Today’s update is brief:
Sosandar plc (AIM: SOS.L), the online women’s fashion retailer, is pleased to announce that trading since 31 August 2017 to the end of…

Stock Trkr
Weekly Summary of Research Findings: 12/4/17 – 12/8/17 [PREMIUM]

Below is a weekly summary of our research findings for 12/4/17 through 12/8/17. These summaries give you a quick snapshot of our content the past week so that you can quickly decide what’s relevant to your investing needs. Subscribers: To receive these weekly digests via email, click here to sign up for our mailing list. More

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SACEMS with Margin [PREMIUM]

Is leveraging with margin a good way to boost the performance of the “Simple Asset Class ETF Momentum Strategy” (SACEMS)? SACEMS each month picks winners from the following set of exchange-traded funds (ETF) based on total returns over a specified lookback interval: PowerShares DB Commodity Index Tracking (DBC) iShares MSCI Emerging Markets Index (EEM) More

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SACEMS with Margin [PREMIUM]

Is leveraging with margin a good way to boost the performance of the “Simple Asset Class ETF Momentum Strategy” (SACEMS)? SACEMS each month picks winners from the following set of exchange-traded funds (ETF) based on total returns over a specified lookback interval: PowerShares DB Commodity Index Tracking (DBC) iShares MSCI Emerging Markets Index (EEM) More

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Small Cap Value Report (Fri 8 Dec 2017) – CER, XAF, PRV

Good morning,
This is the placeholder article, but I’d also like to draw your attention to my recent interview with Cerillion (LON:CER), which was originally published to subscribers on my mailing list but can now also be found on Stockopedia at this link.
It’s a software company which I had already covered a little bit in the SCVR, before realising that the opportunity to interview management would present itself. It’s got a StockRank of 90 and a PE ratio of c. 14-15x. So I hope this interview might be of interest to some of you.

Regards,
Graham

Xafinity (LON:XAF)

Share price: 183.6p (-1%)
No. of shares: 137 million
Market cap: &Pound;251 million
Proposed acquisition of Punter Southall

Interim Results

This is a mid-tier, domestically-focused pensions consultancy. It listed earlier this year, and this is the first time I’ve looked at it. Thank you for suggesting it in the comments.
Checking the shareholder register, there are some big names in the investment industry backing it up.

Yesterday it announced interim results and a very big (£153 million) acquisition.

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Small Cap Value Report (Fri 8 Dec 2017) – CER, XAF, PRV, PCF

Good morning,
This is the placeholder article, but I’d also like to draw your attention to my recent interview with Cerillion (LON:CER), which was originally published to subscribers on my mailing list but can now also be found on Stockopedia at this link.
It’s a software company which I had already covered a little bit in the SCVR, before realising that the opportunity to interview management would present itself. It’s got a StockRank of 90 and a PE ratio of c. 14-15x. So I hope this interview might be of interest to some of you.

Regards,
Graham

Xafinity (LON:XAF)

Share price: 183.6p (-1%)
No. of shares: 137 million
Market cap: &Pound;251 million
Proposed acquisition of Punter Southall

Interim Results

This is a mid-tier, domestically-focused pensions consultancy. It listed earlier this year, and this is the first time I’ve looked at it. Thank you for suggesting it in the comments.
Checking the shareholder register, there are some big names in the investment industry backing it up.

Yesterday it announced interim results and a very big (£153 million) acquisition.

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Small Cap Value Report (Fri 8 Dec 2017) – CER

Good morning,This is the placeholder article, but I’d also like to draw your attention to my recent interview with Cerillion (LON:CER), which was originally published to subscribers on my mailing list but can now also be found on Stockopedia at this l…

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Correlated Unwind of Short Volatility? [PREMIUM]

Is volatility dangerously oversold? In their November 2017 paper entitled “Everybody’s Doing it: Short Volatility Strategies and Shadow Financial Insurers”, Vineer Bhansali and Lawrence Harris survey strategies that directly or indirectly short volatility, including: Relevant strategies (selling options, buying and selling products linked to volatility indexes, risk parity, risk premium harvesting and volatility targeting). Types of More

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