The company remains lossmaking for the moment but has net cash of $130m and total liquidity (cash and undrawn debt facilities) of $415m. It’s cut its global workforce by 15% to save an estimated $10m-$12m a year and is intent on delivering “lower risk and quicker returns to Ophir’s shareholders.”

Monetising 1bn barrels

Revenue of $181m forecast for the current year, on the back of reiterated company production guidance of 12,000 barrels of oil equivalent per day, falls well short of supporting Ophir’s market cap of £544m ($718m).

However, the company has substantial discovered resources in four core countries — Equatorial Guinea, Tanzania, Thailand and Indonesia — three of which are Ophir-operated and, with low development and production costs, are capable of delivering attractive returns without requiring higher commodity prices.

Ophir is focused on monetising these, with the priority for 2017 being to achieve the last primary milestone of project financing for its Fortuna FLNG Project in Equatorial Guinea, which it expects to conclude in Q4.

Well funded and with rising revenue from producing assets helping to support development of a geographically diversified net 1bn barrels of discovered resources, I see Ophir as one of the more attractive stocks to buy in this area of the market.

Remarkably cheap

AIM-listed Crossrider (LSE: CROS) is another company whose half-year results received a warm welcome from the market this week. At a current share price of 75p, the market cap is £106m and about half of it — $68.7m (£52m at current exchange rates) — is represented by cash.

In a research note paid for by the company, issued on the day of the interims, underlying earnings per share for the full year are forecast to advance 41% to 3.8 cents (2.9p), followed by a 71% leap to 6.5 cents (4.9p) next year. This gives a price-to-earnings ratio of around 25.9, falling to 15.3 (or 13.1, falling to 7.8, adjusted for the cash), which seems remarkably cheap for the tremendous growth forecast.

Controlling shareholder

Crossrider’s valuation looks hugely attractive but I note the company has a 73.4% controlling shareholder in Unikmind Holdings Limited and that “the entire shareholding of Unikmind Holdings Limited is held by a trust, the sole beneficiary of which is Teddy Sagi.”

Sagi did nine months jail time in the 1990s for “grave deceit, bribery and insider trading” after being found guilty of manipulating bond prices in Israel, but has since built a multi-billion dollar empire encompassing interests including gambling and money-moving software, ad tech and real estate.

He acquired Crossrider in 2012, moving it from being a nerdy pure technology start-up into the hot digital advertising space and floating it on AIM in 2014 at 103p a share. It made hay for a few years in what was then the Wild West of online advertising but like other companies in the sector, its revenues collapsed as the market underwent rapid technological and regulatory change, much of it due to advertisers realising they were often being ripped off.

Crossrider’s current transition and recovery, as a developer and distributor of digital products in the online security space, could pay off for investors. But personally, I’m avoiding it.

The post 2 growth stocks under £1 appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Digital marketing and ad tech company Crossrider (LSE: CROS) has risen by 143% over the last year. The group’s share price hit a low of 25p in 2016 after investors appeared to lose faith in the firm’s growth plans. But Crossrider’s performance is improving. It is now developing a subscription-based business model, targeting high levels of recurring revenue.

Today’s results suggest the company is making progress. Revenue rose by 5% to $30.1m during the first half and the group’s operating loss fell slightly from $932k to $891k.

The group’s shares have risen by 5% today, which suggests to me that investors are encouraged by the progress made so far. However, I believe there’s also a second, potentially transformative, opportunity at Crossrider.

The group had net cash of $68.7m on its balance sheet at the end of June. That’s high compared to its market cap of £89m, (about $114m). Some of this cash will be used to fund growth and acquisitions. However, if the group breaks into profit this year, as expected, then I think this cash could acquire a new significance.

You see, analysts are forecasting adjusted earnings of 4.9 cents per share this year. These would put the stock on a forecast P/E of about 18. But if you adjust the group’s share price to ignore Crossrider’s net cash, then the effective forecast P/E is just 7.3.

That’s very cheap for a growth stock. So although I’d want to do some further research, investors who believe Crossrider’s management can deliver on its growth plans might want to consider snapping up a few of these shares.

A buy-and-forget stock

Crossrider’s growth may yet disappoint. But ceramics and giftware firm Portmeirion Group (LSE: PMP) — whose brands include Royal Worcester and Wax Lyrical — is a proven performer I’d be happy to buy for a long-term portfolio.

The shares are currently 10% below the 52-week high of 1,000p seen earlier this year, but in my view this sell-off could be a buying opportunity. This business is heavily seasonal, as a large proportion of sales take place at Christmas in the three main markets of the UK, North America and South Korea.

The next set of results will see the first full-year contribution from Wax Lyrical, which Portmeirion acquired last year.

Analysts covering the company expect to see revenue rise by around 9% to £83.3m this year, while earnings per share are expected to rise by about 10% to 66.3p per share. A 4% dividend hike has been pencilled in, giving a payout of 33.4p per share and a yield of 3.7%.

These figures are attractive enough, in my view, but they become more appealing when we consider the group has net debt of just £1.7m and consistently strong free cash flow.

I believe there’s also a possibility that Portmeirion could become a bid target at some point, due to its portfolio of valuable brands and strong cash generation. In my view, these shares offer a low-risk trade with the potential to deliver a healthy profit.

The post Two small-cap growth stocks I’d buy in September appeared first on The Twelfth Magpie.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Portmeirion Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It distributes and develops digital products in the online security space, a hot and fast-growing market. Management is driving growth through both organic expansion and acquisitions funded by the company’s strong cash generation. 

For the first half of 2017, its core App Distribution division performed strongly with preliminary figures showing revenues of $20.6m, up 13.1% year-on-year. According to management, this growth reflects the “successful expansion of Crossrider’s B2C cyber security software business.” To complement this organic growth, earlier this year the group announced that acquisition of CyberGhost, a leading SaaS Virtual Private Network provider. 

Cash rich 

Crossrider has a solid balance sheet to pursue further acquisitions. At the end of June, cash was $67.9m, or around £52m, 47% of the firm’s current market value. 

City analysts are expecting it to report its maiden profit this year. A pre-tax income of £5.9m is pencilled in giving projected earnings per share of 2.9p. Based on these forecasts, shares in the company are trading at a forward P/E of 23.6. 

This growth multiple might seem expensive, but analysts have pencilled in further earnings growth of 71% for 2018, giving a PEG ratio of 0.2 implying that shares in Crossrider are appropriately valued compared to the company’s future growth. 

Even though it has a mixed past, management’s efforts to refocus the business seem to be paying off. Profits are growing, the company has a strong cash balance to fund its expansion (as well as bolt-on acquisition), and there’s plenty of room in the digital market for the firm to expand. All in all, this is one small-cap that’s worth adding to your watchlist.

Small-cap with big potential 

IG Design (LSE: IGR), formerly International Greetings plc is another small-cap with big potential. It flies under the radar of most investors because it’s a relatively boring business that sells gift packaging and greetings cards, amongst other items, in over 150,000 stores around the world. This business, while boring compared to high growth tech firms, is lucrative. Pre-tax profits have jumped 220% since 2014.  For the year ending 31 March 2017, earnings per share rose 25%. 

Going forward, City analysts expect IG’s rapid growth to continue. Analysts have pencilled in earnings per share growth of 11% for the financial year ending 31 March 2018, followed by growth of 11% for 2019. According to the first quarter trading update, the group is firmly on track to hit these targets having made a strong start to the year. 

Unfortunately, thanks to the company’s historical growth rate, shares in IG are not cheap. The shares currently trade at a forward earnings multiple of 18.9. Still, considering the group’s past performance, I believe that this is a price worth paying. 

The company is highly cash generative and was able to reduce net debt from £17.5m last year, to a net cash position of £3m at the end of fiscal 2017. Based on these figures, I wouldn’t be surprised if management decides to start returning more cash to investors via special dividends going forward. The shares currently yield 1.4%. 

Overall, based on IG’s steady growth, cash rich balance sheet and dividend potential, I believe that the company has brilliant potential. 

The post 2 small-cap under-the-radar growth stocks with brilliant potential appeared first on The Twelfth Magpie.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes

Downgraded expectations

Shares in housing maintenance specialist Lakehouse (LSE: LAKE) have tumbled by a whopping 32% today after it released a profit warning. The company stated that difficulties in its regeneration segment have caused its financial performance to be below previous guidance, with reduced client budgets and changes in procurement structures having a negative impact on its performance in the first half of the year. As a result, Lakehouse has posted a pre-tax loss of £1.8m for the half-year, with its full-year expectations being downgraded.

Clearly, today’s news is disappointing for Lakehouse’s investors and, while it has the potential to turn its performance around, there is a risk that the challenges it has faced of late will continue. So while the company remains confident in its long term outlook — as evidenced by the payment of a 1p per share dividend versus no dividend in the prior half-year —  it may be prudent to watch rather than buy Lakehouse at the present time. That’s especially the case since social landlords must now reduce their rents by 1% each year until 2020, with the possibility of a negative impact on regeneration spend during the period.

Multiple challenges

Also falling today were shares in Crossrider (LSE: CROS), with the digital advertising platform creator stating that it now expects revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) to be 25% lower in the current year versus the previous year. This has caused its shares to slump by 29% today, which brings their fall for 2016 to 51%.

The fall in sales and profitability is at least partly due to structural changes in the markets in which Crossrider operates. Mobile revenue growth rates have declined significantly, especially within mobile subscription campaigns, which have in turn been hurt by increasing regulation in a number of key markets. And with revenue from monetising web apps with advertising being in decline, Crossrider is facing multiple challenges which are set to negatively impact on its bottom line.

Clearly, Crossrider has the capacity to turn its performance around. That’s particularly the case because the company has $70m of cash and could therefore make acquisitions. However, with its near-term performance set to disappoint, there appear to be better opportunities elsewhere.

Upbeat recent results

Meanwhile, Zoltav Resources (LSE: ZOL) is down by 13% today despite no significant news flow having been released by the Russia-focused oil and gas company. Of course, its shares have performed relatively well this year due to an improved outlook for the oil industry, with the price of black gold rising from $28 per barrel to close to $50 per barrel. This has improved investor sentiment in a range of oil and gas companies, with there being further potential for this in the short to medium term.

Furthermore, Zoltav’s share price has benefitted from an upbeat set of results being released last month which showed that it has recorded its maiden operating profit due in part to a rise in revenue of 41%. While this is very positive for the company and its shares could deliver a rise in the coming months, with a number of oil and gas stocks being profitable and trading on low valuations there may be better risk/reward opportunities available elsewhere.

The post Should you avoid these 13%+ fallers today? Lakehouse plc, Zoltav Resources Inc and Crossrider plc appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Profit warning

Shares in Crossrider (LSE: CROS) have fallen off a cliff on Tuesday following a terrifying trading update.

The firm — which designs advertising platforms for digital devices — has slumped 27% after warning that “structural changes… have negatively impacted on the outlook for future trading.”

Crossrider noted that “mobile revenue growth rates have declined significantly,” particularly from mobile subscription campaigns due to regulatory changes in some countries. And revenues from web app advertising “is significant and notably faster than previously expected,” the tech play added.

Crossrider now expects revenues and EBITDA to collapse 25% from 2015 levels, it advised.

City expectations for a 6% earnings rise have now been put to the sword, making a P/E ratio of 10.5 times look suddenly expensive. I reckon investors should give Crossrider short shrift given the massive shifts across its key markets.

Revving higher

Car dealership Lookers (LSE: LOOK) has suffered no such worries in Tuesday trade, the business recently dealing 8% higher following perky first-quarter numbers.

Lookers enjoyed “continued improvements in all areas of the business” during January-March, it advised, with gross profits from sales of new and used cars rising 23% from the corresponding 2015 period. On a like-for-like basis, new and second-hand vehicle demand rose 5% and 7%, respectively.

On top of this, Lookers also benefitted from bubbly aftermarket activity during the quarter. Gross profits here advanced 25% between January and March, or 7% on an underlying basis.

And the impact of a stable UK economy on car demand should keep sales at Lookers ticking skywards, in my opinion. New vehicle sales enjoyed their best April since 2003 last month, according to the Society of Motor Manufacturers and Traders.

The number crunchers expect earnings at Lookers to climb 7% in 2016, resulting in a P/E rating of just 8 times. I reckon this is a steal given the company’s terrific momentum.

Video player

Shares in tech play Blinkx (LSE: BLNX) have also bounced higher in Tuesday business, the company last dealing 19% higher on the day.

Blinkx — which generates revenues by allowing digital users to find videos more easily — saw pre-tax losses surge to $94.3m in the period to March 2016 from $24.8m a year earlier.

The company saw revenues slip to $166.7m from $215m in 2015 as the impact of non-core asset-shedding weighed. And a colossal $81m worth of one-off charges also contributed heavily to Blinkx’s pre-tax loss.

Blinkx is clearly making progress in transforming itself into a programmatic platform builder, the development of its RhythmOne product helping drive revenues here 68% higher in 2016.

But the company’s restructuring programme still has plenty to deliver before bumping the firm back into the black. Indeed, the City expects the firm to clock up further losses in fiscal 2017. Regardless of today’s handsome share price bump, I believe Blinkx remains a very high-risk selection.

The post Why are Crossrider plc, Lookers plc and Blinkx plc shaking wildly today? appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.