Long, wrong and deliriously happy - Sosandar still cheap! Nigel Somerville writes

Horse Hill oil tankered out – no evidence at all that the Gatwick Gusher is an, er…gusher as David Lenigas tweets suggest. Read HERE

I called AIM-listed Sosandar (SOS) a buy at 13p, moved to hold at 20p and suggested taking a slice of money off the table at 25p (I got over 27p). I still hold a shade over 75% of my holding so I’m still long, but the shares have moved up further. So perhaps I was wrong to be such a coward and cash in so quickly. But I am deliriously happy, with a good chunk of my original stake banked, a whopping profit on the rest and seemingly plenty more to come. Having offloaded a bit, I raised my stance on the rest to come to a target of 40p to 45p. But once again the shares have moved so strongly that I wonder whether the 40p mark may be troubled within days.

Folli Follie… Some people are on the pitch, they think it’s all over….it is now! (Almost). Read HERE

My assumption, in the wake of the May trading update, was that gross profit would run at around half of sales. In the full year numbers we see that sales were £1.35 million and gross profit £0.67 million. Pretty much bang on. Meanwhile, trading in Q1 (to June) was up 73% which suggests growth running at 20% a month. Annualised, that suggests monthly revenues will be up about 900% by March next year, compared to March this year. We know, from the May trading statement, that full year (to March) revenues were £1.34 million. But we also know from the company’s interims that the 9-month number, to December, was £0.86 million. Therefore Q4 was £0.48 million. We can therefore calculate that Q1 revenues were £0.83 million. If we extrapolate that 73% Q-on-Q growth we get £1.44 million for Q2, £2.49 million for Q3 and £4.30 million for Q4. That would bring FY19 (to March) revenues in at £9 million. That would suggest gross profits of £4.5 million.

Woodford Patient Capital Trust: The Big Short (June update - WPCT) – Um, Neil, what do we do now? Read from Cynical Bear HERE

What I would suggest is that the market would focus on Q4  - where the numbers would indicate annualised sales of £17 million (even if growth came to a shuddering halt) and gross profits of £8.5 million. Against that, costs will also rise. For FY18 we saw administrative expenses of £3.8 million and a further £3 million put down to the costs of the reverse acquisition (ie one-off costs). In the interims to December we saw administrative costs (for nine months) of £2.5 million, which suggests £1.3 million spent in Q4 – a pretty sharp rise. Annualise that and it comes in at £5.2 million. What might that be a year from now? I don’t know, but I would note from Note 6 to the FY18 Accounts that the boardroom costs to 1 November 2017 were £0.59 million, falling to £0.14 million from then until the full year in cash, and a further £0.5 million in shares. What do I learn from all this? I learn that costs are volatile and perhaps we will get a better idea from the interims when they come! Meanwhile annual administrative costs of around £5-6 million seems perhaps about right as a ballpark figure. That would suggest as at March 2019 the company will be profitable to the tune of around £2 million a year, but would mean that Sosandar will probably report a FY loss to next March of around £1 million. It would also suggest that Sosandar moves into profit during Q4 and may even just scrape it during Q3. That would, in my view, be quite remarkable.

What Hammerson, BT Group and GlaxoSmithKline are really trying to say. From Chris Bailey HERE

Put, say, £2 million pre-tax profit on a rating of 25 (hardly a demanding multiple for a heavily growing and profitable enterprise and we arrive at a share price (with 107 million shares in issue) of 46.8p. Take 20 million options into account and that drops to 39.4p. Of course, if the market thinks that a PE of 50 is more appropriate (and growth in sales of 900% would perhaps justify that!) then we are looking at around 80p. Indeed, I can see the shares being £1 if the curent growth is maintained and costs are held under control. That is why I still hold the vast majority of my shares, but it is also why I have 40-45p marked in as the next point at which to take more cash off the table. In the short term, if the shares notch up to the 40p mark then I’ll be selling a few more. But we should have a trading statement for H1 to come, as well as the interims when I can reassess my numbers. My hope is to be able to upgrade the target price – but in the meantime, if I can get a chunk away at 40p that is what I shall do. And then I’ll be even more deliriously happy, still long and – I hope – still wrong!

Woodford June update - Equity Income Fund: Legal & General jettisoned in bid to keep hot air balloon afloat

Filed under: Sosandar, Horse Hill, Gatwick Gusher, David Lenigas, Folli Follie, Woodford, Chris Bailey

Lloyds - you cannot eat relative performance... but still bet on the black horse says Chris Bailey

02/21/2019

Yourgene - debt cleared; this is an amazing deal (plus comment on Hardman) from Tom Winnifrith

02/20/2019

Whitbread has a plan and Restaurant Group patently does not says Chris Bailey

02/15/2019

Thoughts on The US Market Juggernaut - and Tesla & IQE - from Lucian Miers

02/14/2019

Ariana Resources - Nigel Somerville updates on buy tip for 2019

02/13/2019

Is the Petrofac share price collapse a good buying or trading opportunity? Gary Newman reviews...

02/12/2019

Red Rock Resources – updates on Congo progress, Buy to almost double says Tom Winnifrith

02/11/2019

Thomas Cook - not buying its holidays but still liking its shares says Chris Bailey

02/08/2019

Union Jack Oil - various potential share price catalysts by HotStockRockets

02/07/2019

Centrica - good total return value? Chris Bailey reviews

02/06/2019

Tesla Q4 earnings call - One More Thing. From Lucian Miers

02/05/2019

Reach4Entertainment - 2018 significantly ahead & also expects 2019 ahead; Buy

02/04/2019

Is Rank really so dank? Chris Bailey reviews

02/01/2019

Dominos Pizza, Crest Nicholson, Royal Mail & PZ Cussons - any buys amongst them?

01/31/2019

IQE - sell the rally says Lucian Miers

01/30/2019

Is Tesco talking sense? Chris Bailey reviews

01/29/2019

Bluebird Merchant Ventures - rapid progress to positive cash flow?

01/28/2019

Obtala - Long Term Incentive Plan announcement... but no need for shareholder anger here

01/25/2019

I told you Metro Bank was dodgy...and not to underestimate Chinese chavs re. Burberry

01/24/2019

KAZ Minerals has the potential to become a copper mining giant in the future considers Gary Newman

01/23/2019

Character Group - reassuring AGM trading update, a speculative buy?

01/22/2019

Update on Flybe - Short Term Lifeline for the Retail Punter from Lucian Miers

01/21/2019

Obtala - quarterly update, now supercharging development. From HotStockRockets

01/18/2019

Headlam - time to buy? Chris Bailey considers...

01/17/2019

Telit - auto sale on track, but trading statement is a load of cobblers. Sell says Tom Winnifrith

01/16/2019

Shoe Zone - a value proposition suited to the challenging consumer environment?

01/15/2019

Flybe put out of its misery for 1p. Next up for near wipeout is Interserve says Lucian Miers

01/14/2019

Sosander - Q3 trading statement update from Nigel Somerville

01/11/2019

Union Jack Oil - Biscathorpe-2 well spud, let the excitement commence…

01/10/2019

Christmas trading update time - Morrisons, Greene King or Joules a buy?

01/09/2019

Bowleven - time for a small drop of Ouzo as 15p special dividend is announced says Nigel Somerville

01/08/2019

KEFI Minerals - shares slightly lower on Tulu Kapi project update, BUT...

01/07/2019

Next - no profits growth... but that is fine argues Chris Bailey

01/04/2019

Five slam-dunk shares to sell for 2019 by Nigel Somerville

01/03/2019

A share tip of the year for 2019 from Tom Winnifrith

01/02/2019

Rockhopper Exploration - a long term buy at the current price?

01/01/2019

Highland Gold is well worth considering says Gary Newman

12/31/2018

A share tip of the year for 2019 from Gary Newman of ShareProphets

12/28/2018

Investment is all about passion...not passion investments says Chris Bailey

12/27/2018

Professor Malcolm Stacey with his World Famous Christmas Lecture...

12/24/2018

What looks interesting in the FTSE 100? Chris Bailey reviews...

12/21/2018

Optibiotix - board strengthened, still a buy?

12/20/2018

Boohoo vs ASOS - could one unravel very soon indeed?

12/19/2018

Retail & SSE plc omnishambles, but some value in the sectors? Chris Bailey reviews...

12/18/2018

Lessons from AA plc. Lucian Miers writes...

12/17/2018

PZ Cussons - time for a research trip to Nigeria? Chris Bailey writes...

12/14/2018

Wood Group, Superdry, Dixons Carphone & DP Poland - any buys from a busy RNS day?

12/13/2018

KEFI Minerals - positive regulatory consent news in the coming weeks?

12/12/2018

Thoughts on Thomas Cook - stay away, Short Flybe instead says Lucian Miers

12/11/2018

Petropavlovsk - POX Hub processing milestone, Buy

12/10/2018

Yourgene - Premaitha as was - interim numbers not impressive, but still a strong buy?

12/07/2018

Numis statement shows why the finnCap IPO is such a stinker says Tom Winnifrith

12/06/2018

Synectics - remains a recovery buy say Tom Winnifrith & Steve Moore

12/04/2018

Blue Prism Group - argues it is pleased in trading update, but shares still a sell?

11/29/2018

Greencore & Ibstock - a tale of two disposals from Chris Bailey

11/28/2018

Premier Oil could see a swift rise when oil bounces considers Gary Newman

11/27/2018

Optibiotix - Greek deal news via Adam Reynolds keyboard, but better to come. Buy.

11/26/2018

Updated thoughts on Tesla - stay short says Lucian Miers

11/23/2018

Three larger cap buy ideas from Chris Bailey

11/22/2018

AO World - interims argue remains confident, but can high growth rating really be justified?

11/21/2018

Dividend stocks & what to make of the Brexit omnishambles from Nigel Somerville

11/20/2018

Sirius Minerals - patience will pay longer term argues Gary Newman

11/19/2018

Falanx - shares to still more than double?

11/16/2018

Victoria - update on bond fiasco, remains a sell says Lucian Miers

11/14/2018

Glencore looks too cheap considers Gary Newman

11/13/2018

Bowleven - raising my stance back to buy says Nigel Somerville

11/12/2018

First Derivatives - it is smoke & mirrors, keep selling says Lucian Miers

11/09/2018

Buy ITV and Marks & Spencer?

11/08/2018

Imperial Brands - fade the moral outrage & buy says Chris Bailey

11/07/2018

Bushveld Minerals - banking some profit prudent, but still more to come?

11/06/2018

Keep buying any weakness in Centamin as the company is now back on track says Gary Newman

11/05/2018

Horizonte Minerals - I remain confident following feasibility study says Gary Newman

11/02/2018

Obtala - sharpens focus & a fundraising, still a buy says HotStockRockets

11/01/2018

Restaurant Group - what to make of Wagamama acquisition? Chris Bailey reviews

10/31/2018

Cairn Energy will see rapid production growth in the coming years - Buy says Gary Newman

10/30/2018

Barryroe could still come good for Lansdowne Oil - speculative buy says Gary Newman

10/29/2018

WPP advertises a shocker - where now?

10/26/2018

Barclays or Metro Bank - who to fancy in a financials cage fight?

10/25/2018

Whitbread - a core FTSE-100 holding? Chris Bailey reviews

10/24/2018

Anglo Asian Mining - a golden buy?

10/23/2018

Alba Mineral Resources - updates from Wales and Horse Hill, excitement soon to be sparked?

10/22/2018

Shoe Zone - shares jump on ‘ahead of expectations’ update, but still an income buy

10/19/2018

SOCO International - a lot to like at this share price level, buy says Gary Newman

10/18/2018

Ariana Resources - gold production & exploration positives. Nigel Somerville writes

10/17/2018

Shenanigans at First Derivatives Do Not Look Good. Sell says Lucian Miers

10/16/2018

Five large caps for capital growth from Chris Bailey

10/15/2018

Dunelm - am I at danger of buying some frilly curtains? (and more). Chris Bailey writes

10/12/2018

Synectics - a buy for recovery say Tom Winnifrith & Steve Moore

10/11/2018

Versarien remains a sell for the brave (& First Derivatives). Lucian Miers writes

10/10/2018

Rose Petroleum - a buy says HotStockRockets

10/09/2018

Union Jack Oil - adding to material potential catalysts. Buy says HotStockRockets

10/08/2018

Tlou Energy - a speculative buy considers Gary Newman

10/05/2018

Tesco - shares now too cheap? Chris Bailey reviews

10/04/2018

easyJet & Royal Mail - where now after share price shockers? Chris Bailey reviews

10/03/2018

Goldplat - post full-year results, a buy suggests HotStockRockets

10/02/2018

Columbus Energy Resources - after interims remains a buy says HotStockRockets

10/01/2018

Bluebird Merchant Ventures - updates on projects, remains a buy says HotStockRockets

09/28/2018

Next & Imperial Brands - following news, updated views from Chris Bailey

09/27/2018

Why I would short Time Out Group says Gary Newman

09/26/2018

Randgold merger - what to do? Chris Bailey reviews

09/25/2018

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