Brokers' Views: Hoodless Brennan

The small-cap team at broker Hoodless Brennan covers a wide range of sizes and sectors, and is one of the only brokers to offer a ‘speculative buy’ recommendation.

Coming under this classification is the wood-hardening expert Accsys Technologies, after slipping to a small loss on revenues reduced 48 per cent to ?9.3 million for the half to September. But, with costs cut, improved factory capacity and sales up ‘significantly’ to record levels in the second half, the broker is optimistic that the depressed shares offer promise.

Another is global payments company NEOVIA Financial, which has just enjoyed a contract-winning spree. Although Hoodless says it is likely that NEOVIA’s contracts will add ‘relatively modest amounts to the top line’, they are
a ‘reasonable indication of steady progress’ and prompt a speculative buy stance at 52.25p.

Potential punts

Renewable fuel producer GTL Resources is also worthy of a speculation at 58p as it makes a ‘quicker-than-expected return to profitability’. With increased production output and margins likely to continue improving due to macro-market moves in the US and Brazil, ‘the group is extremely cheap on a 2010 view at only around 3.3 times earnings reflecting the uncertainty’.

Likewise, Canadian video content and DVD distributor Entertainment One is a speculative buy at 39p, at which level, even on ‘the most prudent earnings estimates’, the shares trade at almost a 50 per cent discount to the media sector. After half-year results to September showed that trading was in line with expectations, the broker has set a 48p one year price target.