Collins Stewart

In a note entitled ‘Summit Special’, analyst Nick Batram outlines the attractions of AIM-traded factual media concern and corporate client Ten Alps. Rating the 50.25p shares a buy and upgrading his price target to 92p, he notes that preliminary results to March were ‘ahead of expectations at all levels’, showing sales up 18 per cent at £81.4 million and PBT increased 34 per cent to £3.9 million.

Forecasting profits of £4.8 million and 6.2p EPS this year, he argues that, for just £25 million, investors are buying a business ‘with an impressive track record’ and a ‘substantial, growing and potentially defensive client base’ sitting ‘right in the sweet spot of media convergence’.

A forward multiple of 8.1 ‘substantially undervalues’ Ten Alps.

Record highs at Cape
Colleague Michael O’Brien considers that another house stock, Cape, trades at the wrong price. Warming to a positive AGM announcement flagging up activity ‘at record highs across the group’, he likes the fact that the energy support services counter derives over 50 per cent of turnover from the buoyant oil services and petrochemicals market. Believing debt concerns overdone, he argues, ‘In our view there remains considerable scope for a rerating towards other oil service related quoted companies.’

Forecasts for December 2008 and 2009 are upgraded accordingly, with this year’s pre-tax estimate nudged to £44.7 million (from £41.7m) and 2009’s to £50.3 million (from £46.5m). Earnings rise to 28.6p (from 26p) for this year and to 31.2p next, with a 386p target set for the 282p shares.