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Last Week/ This Week
The investment sentiment driving market opinions are noted in this section. Clearly the hindsight summary of Last Week has 20/20 vision. Our investment narrative hopefully improves your macro investment view although any firm forward looking opinions expressed by OMG will not be backed with trading suggestions.
……………….LAST WEEK
….the FTSE 100 happily brushed a 14 year high at 6,898 on Tuesday. It closed the week however, just 0.5% ahead at 6,855, the FTSE250 increased 0.2% while the AIM All Share at 779 was a virtually unchanged. The reduction in Eurozone interest rates and the implied lower exchange rate suggested the start of a credible anti- deflation campaign. The disappointing US jobs growth reported on Friday, took most of the smile off the week.
THIS WEEK……………….
….geopolitical risk is the black box gathering dust behind the markets economic optimism. What level of escalation from what source is required to prise the lid open is unpredictable – so party on. The reporting season moves into full swing and profits upgrades are likely to out-number downgrades. The UK reports Balance of Trade and Industrial Production on Tuesday – a reduced deficit and an increase in production is possible. On Thursday a Housing Survey could show that some tinsel may have tarnished. There are plenty of Eurozone stats being reported, which are likely to support and perhaps accelerate the anti-deflation action already underway. Markets seem set to advance.
Pause for Thought
The FTSE reached a peak of 6,950 in December 1999. The current FTSE 100 earning valuations (P/E, 13.8x, Yield, 3.38%) are not stretched, so there could be new highs by the year-end
Sunday Times
Company Report
ACC – Moving up from the bottom of the ‘Hockey Stick’ value curve
Watch out for four more company reports this week.
Access Intelligence (ACC)
3.25p (3-2.5p)
Mkt Cap £8.27m
Next Results: Finals to November – RNS est. March
Access recently paid a bonus of a million warrants to the directors of an acquisition that seems to have beaten targets. Access are a supplier of Software-as-a-Service (SaaS) solutions for the full life cycle management of a company’s governance, risk and compliance, Nearly 80% of revenue is the sticky reoccurring kind that should have a High rating. Access has made acquisitions, one of which went wrong which it has recovered from.
The finals to November 2014 that are to be reported by March 2015 are likely to confirm this progress. After the recently reported improved interims the veteran venture capitalist and Chairman Michael Jackson, topped up his holding to 10.6% at 2.9p a share. The Interims showed a marginal loss of £56k but more importantly £518k of cashflow had been generated from operating activities. It should be noted that around 50% of revenue was invested in technical development and that there are a number of products to be launched.
This investment programme brings all solutions onto a standardised platform and enables Access Intelligence to deliver an enterprise governance, risk and compliance solution, creating a springboard for effective cross-sell and upsell across its brands. Cash Balances are £1.1m so with no need for cash the price recovery could at some stage be swift.
