Shares digital

by John Marshall

Stamp specialist Stanley Gibbons has placed 19% of its shares with institutional investors and directors in a move to overcome liquidity problems and spark a recovery in the share price.

Shares in the London-based firm have lost over a fifth of their value since the autumn, falling from highs of over 250p to the current 193p. However, Rhys Williams, a retail analyst at Arbuthnot Securities, believes that the share price has been hit by private client sellers re-balancing their portfolios ahead of changes to CGT rules that came into effect earlier this month. He also thinks many investors got wind of a stock overhang and have been waiting for this to clear.

Stanley Gibbons is one of the world’s leading stamp specialists and for years its catalogue has been considered as the philatelist’s bible. Volatility on global stock markets is believed to have sparked renewed interest in stamps and rare autographs – they are seen as an attractive alternative to investing in shares and funds. The firm’s collection has been strengthened recently with the acquisition of two rare collections.

The company’s revenue has risen around 10% this year, while income has also been bolstered by the company’s increased online option, with internet revenue up 60% on the same period a year ago.

House broker Seymour Pierce, which has a price target of 265p on the shares – 37% above the current price – is forecasting earnings of 13.8p a share this year, rising to 18.8p in 2009, placing the stock on a PE of around 14, falling just over ten next year.

Shares says: The shares remain attractive at current levels.