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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring Fever-Tree, Gym Group, IMImobile and Hardide.

by David Campbell, Selin Bucak on Nov 13, 2017 at 05:00

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Key stats
Market capitalisation£2,360m
No. of shares out115m
No. of shares floating92m
No. of common shareholdersnot stated
No. of employees40
Trading volume (10 day avg.)2m
Turnover£102m
Profit before tax£35m
Earnings per share23.70p
Cashflow per share24.53p
Cash per share28.60p

Fever-Tree

Old Mutual fund managers have taken advantage of a dip in the shares of blockbuster Alternative Investment Market stock Fever-Tree (FEVR) to top up their stake in the mixer drinks maker.

Stock exchange filings show Old Mutual increased its stake in Fever-Tree at the beginning of the month, as the shares continued to give up ground having hit a high of £24.85 in September.

The fund group raised its holding from 9% of the company’s shares to 10%, worth £236.5 million at a share price of £20.52.

The shares have been a stellar performer since flotation in 2014, rising 1,100% over those three years. Old Mutual managers Richard Watts, who runs the Old Mutual UK Mid Cap fund, and Dan Nickols, manager of the Old Mutual UK Select Smaller Companies fund, are the biggest fund investors in the stock.

Shares in the company initially surged this week after the drinks company upgraded its profits forecasts for the fifth time in a year, but pared some of those gains to end the week 5.5% higher.

Key stats
Market capitalisation£279m
No. of shares out128m
No. of shares floating109m
No. of common shareholdersnot stated
No. of employees235
Trading volume (10 day avg.)1m
Turnover£74m
Profit before tax£22m
Earnings per share4.44p
Cashflow per share15.44p
Cash per share3.76p

Gym Group

Liontrust’s Citywire A-rated sustainable investment team has ramped up its exposure to no-frills fitness business Gym Group (GYM) as the company begins to climb from last year’s record low.

The managers increased their investment in the stock from below a disclosable position to just over 5% of the business £14.4 million at a price of 221p, up from 170p at the start of the year.

The shares are held in A-rated Peter Michaelis and Neil Brown’s £301 million Liontrust Sustainable Future UK Growth fund. The duo first initiated a position in the stock during the summer.

‘Gym Group was a new addition to the portfolio over the quarter, with the company benefiting from our enabling healthier lifestyles theme,’ the managers wrote in September. ‘The group has a network of low-cost, high-quality gyms and is expanding throughout the UK.’

Gym Group, which listed two years ago at 195p, pioneered a low-cost model of pay-as-you-go gym membership. Barclays rates the business a ‘buy’ on a target price of 250p.

Key stats
Market capitalisation£123m
No. of shares out61m
No. of shares floating49m
No. of common shareholdersnot stated
No. of employees854
Trading volume (10 day avg.)1m
Turnover£76m
Profit before tax£9m
Earnings per share6.73p
Cashflow per share10.75p
Cash per share23.90p

IMImobile

Citywire AA-rated small cap supremo Giles Hargreave has more than doubled his holding in cloud communication and software provider IMImobile (IMOI) as it drifts lower from last month’s record high.

Hargreave upped his stake in the business from 2.4% to 5.7% of the shares worth £7 million at a price of 200p, down from an all-time high of 221p in early October.

The shares are primarily held by clients of his eponymous broker and fund manager Hargreave Hale which was this summer purchase by Canadian banking group Canaccord.

Leading UK hedge fund manager Toscafund’s small cap mandates have recently banked some profits on the tightly-held stock, reducing their stake from above 18% to 13.4%.

Investec reiterated its buy guidance last week, on a 250p price target. That followed a trading update saying full year profit was likely to beat earlier expectation, despite upping its investment in sales and distribution.

Key stats
Market capitalisation£m
No. of shares out1,636m
No. of shares floating898m
No. of common shareholdersnot stated
No. of employees35
Trading volume (10 day avg.)1m
Turnover£2m
Profit before tax£-1m
Earnings per share-0.10p
Cashflow per share-0.07p
Cash per share0.13p

Hardide

Citywire A-rated micro-cap stockpicker Chris Hutchinson has become the second leading investor to report backing this week for a fund raising by specialist coatings manufacturer Hardide (HDD).

Hutchinson upped his stake in the business from just over 4% of shares to just over 6% worth just under £1 million at a share price or 1.8p, down from a June peak of 2.1p.

The shares are held in his tax-efficient £155 million Unicorn AIM VCT. Amati’s AAA-rated small cap team, led by Dr Paul Jourdan, also reported that it had sharply upped its holding in the business.

Hardide provides ultra-hardwearing protective coats for engineering components used by industries such as oil and gas extraction and aviation. The business last week said that it had raised £2.5 million in an oversubscribed placing as it sought funding for a US expansion.

The business has inked a number of new deals this year as a rising oil price lifted sector expenditure. House broker FinnCap holds the business on a price target of 2.1p.

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  • Fevertree Drinks PLC (FEVR.L)
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  • GYM Group PLC (GYM.L)
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  • IMImobile PLC (IMOI.L)
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  • Hardide PLC (HDD.L)
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