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Equity Investment Technique 1 – The low price to sales conundrum

Imagine you come across a company analysis report where the author advocates buying a company’s stock because it has a low “Price to Sales” valuation in the past 5, 10 or 15 years.

 

Do you take the writer’s words and make the investment or the author is leading you into a “Value Trap” proposition.

In other words, is there an “Acid Test” to analysis why price to sales looks so depressed?

 

The answer is “Yes, we can!”

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Last Month Movers and Shakers on the FTSE Shares Market

This is my new and brief segment on the UK FTSE publicly-listed companies that saw 10% moves (either direction) in the past month after reporting an update or results.

Today, you will be reviewing companies that have reported an update or have released their results during the 15th – 19th August 2016.

Fallers

 

Castleton Technology PLC (AIM: CTP); – a software and managed services provider to the public and not-for-profit sectors.

The company reported full-year results on the 16th of August. The shares have fallen from £0.74/share to £0.655/share, which wiped out £6.4m in market value.

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Finsbury Food Group done a five-bagger and still presents compelling opportunities.

What is Finsbury Food Group?

The company is made up of five divisions, which includes:

  1. Foodservices; – The brands involved are Kara and the newly acquired Johnstone’s. Both make special treats and premium snacks for coffee chains, hotels, pubs and fast food outlets in the domestic and international market.
  2. Licensed Brands (most significant segment); – Finsbury Food got licenses to manufacture cakes and bread for some of these well-known brands such as Disney, Weight Watchers, Vogel, Thornton, Village Bakery and Cranks.
  3. International; – It owns 50% of Lightbody Stetz, which helps distribute its manufactured products, particularly in France.

 

However, in 2014 it acquired Fletchers Group (a rival bakery business) for £56m that would double the size of Finsbury. This is paid for by raising £35m in equity.

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Rightmove gained 1,250% since IPO, is it time to sell?

Bit of background

Rightmove was conceived as a joint venture between four of the UK’s largest property agents: Halifax, Countrywide plc, Royal & Sun Alliance, & Connells in 2000 and got listed in 2006.

The firm bread & butter is selling advertising space to estate agents and offering additional advertising products. Now it displays up to 1.2m properties in the UK.

Now it is the biggest UK property internet portal with a 77% of the online real estate market and gives the shares are at all-time highs regarding market value, is there room for more growth?

 

Here are 10 crucial facts about its operating + financial performance:

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