There's divided opinion in the Shares camp about the quality of earnings at Quindell Portfolio (QPP:AIM). Our resident Quindell bull, Steve Frazer, is away on holiday so for now, our Quindell bear, Dan Coatsworth, takes a look at today's trading update. We're pleased to see the insurance services provider has exited the complicated equity swap agreement that worried investors a few months ago. This positive move, together with an upbeat trading statement, sent the shares up 4.7% to 11.25p. Adjusted earnings per share (EPS) for the first half is 1.1p. Stockbroker Daniel Stewart forecasts 2.1p EPS for the whole year, so it looks like the business is on track.
Yet that only puts Quindell on a price to earnings multiple of 5.4 times – so investors need to consider why the market is pricing such a discount into the stock. It could be that several of its acquisitions weren't very good companies in the first place, so bolting them together won't necessarily make them better.
The market gave the cold shoulder to Great Portland Estates' (GPOR) latest deals in the West End, with the shares easing off by 2.5p to 576p. The £2 billion cap has bought a retail and office property - 76 Oxford Street – and also obtained the necessary rights for its 73/89 Oxford Street development.
BHP Billiton's (BLT) fourth quarter update saw better-than-expected production in copper, iron ore and metallurgical coal but a miss in petroleum. The market focussed on the positives, sending the shares up 2.1% to £18.69.
Mexican metals producer Fresnillo (FRES) jumped 3% to £10.46 after reporting a 6.3% rise in second quarter (Q2) silver production. Yet it has downgraded full-year gold production by 5%. Its sector peer Hochschild Mining (HOC) also pleased the market with Q2 figures, getting a better share price reaction – up 8.6% to 147.8p – because there's big cost cutting measures being implemented including pay cuts to the top brass and the removal of two non-executive directors.
Distributor Electrocomponents (ECM) could only muster a 0.4% gain to 250.6p after revealing a 1% rise in underlying sales growth for the first three months of its new financial year. This implies no growth from the second half of its previous financial year. We last wrote on the service group in early June where we were sellers at 274p.
Chinese branded sportswear maker Naibu Global (NBU:AIM) nudged up 3p to 64.5p on a positive trading update. The £34 million cap's trading is going from strength to strength, as demonstrated by a 17.8% rise in orders at its Autumn and Winter range fair, ahead of a rise in production capacity by the end of this year. Broker Daniel Stewart urges clients to 'buy' and has a 200p price target for the grudgingly-valued stock. Read our recent story on Naibu here.
Micro cap Vmoto (VMT:AIM), the maker and distributor of 'green' two wheel electric powered vehicles, vaulted 31.5% higher to 1.15p on a well received trading missive. The £7.8 million cap motored on news of a maiden monthly profit struck in June driven by bumper demand for its products in China.
Internet domain management specialist Top Level Domain (TLDH:AIM) rose 6.3% to 6.3p on the back of news that ICANN, the body which regulates domain names, has signed the first contract for the first of the new top level domain names.
News of a potential takeover boosted shares in Xenetic Biosciences (XEN: AIM) by 5.4% to 7.2p in early dealings. The board is looking for a US firm to buy the company to improve its access to finance and give it quicker and more cost-effective access to a listing in the US, where it believes smaller quoted bioscience firms are better followed and understood than on London's Aim market.
Bathroom accessories manufacturer Samuel Heath & Sons (HSM:AIM) dropped 16.7% to 287.5p as results for the year to 31 March revealed only a marginal rise in taxable profits from £632,000 to £633,000. The £8.8 million cap also issued a downbeat assessment of immediate prospects, saying orders have tailed off since the end of May and 'there is scarcely a market, in which we sell, which does not have a problem'.