Brokers’ view: Canaccord Genuity

Approach to investing

Approach to investing from Growth Company Investor

Canaccord keeps track of its recommendations 

Analysts Gareth Evans and Bob Liao highlight the potential of Ubisense (a client of Canaccord), which joined AIM this year in a £6 million float. The Cambridge-based location-tracking specialist provides a variety of technology that can track the location of items, already in use by companies such as BMW and Airbus. Liao and Evans value the business at £59 million, which they base on 3.7 times 2012’s EV/sales.

A loss before tax of £400,000 on sales of £20.9 million is forecast for the year to December 2011. In 2012, maiden profits of £1.3 million are pencilled in on turnover of £26 million. Rating the shares as a buy, a target price of 269p is identified.

Brotherly love
The financials team at Canaccord is keen on investment bank Close Brothers (also a Canaccord client.) The team of Ian Poulter, Catherine Heath and Biraj Borkhataria comment that, following a recent update, the business ‘looked solid and continued themes seen earlier in the year’ with its Winterflood market-making operation described in particular as a ‘resilient performer’.

Identifying a target price of 925p, adjusted pre-tax profits of £127.8 million on income of £556.2 million is forecast for the year to July 2011. In 2012, profits of £155.1 million on income of £610.7 million are pencilled in. Dividends of 41p and 43p are forecast for 2011 and 2012 respectively.

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