Three popular private investor stocks, Victoria Oil & Gas (LSE: VOG), Mothercare (LSE: MTC) and Angle (LSE: AGL), each issued trading updates this morning.
All three firms have seen their share prices move sharply since markets opened, so I’ve been taking a closer look at each company’s news.
Mothercare
Shares in Mothercare fell by 7% this morning after the firm reported a 5.2% decline in group sales.
Although UK like-for-like sales were up by 1.3% and online sales rose by 24%, total UK sales fell by 0.9%.
UK store space fell by 5.3% as loss-making stores were eliminated, but Mothercare chief executive Mark Newton-Jones said that careful stock management and reduced discounting is helping to improve profit margins.
However, the firm’s international expansion appears to have hit a speed bump. Despite a 7.9% increase in international retail space over the last 15 weeks, sales fell by 4.8% during the same period.
This is probably the major factor behind today’s drop. If Mothercare’s total sales are falling, then the firm’s wafer-thin profit margins and its forecast P/E of 28 look increasingly unappealing.
Mothercare remains a sell, for me.
Victoria Oil & Gas
Things seem to be improving at serial underperformer Victoria Oil & Gas.
The firm debuted a new format quarterly update today, highlighting a 178% rise in gas sales from its Logbaba field during the second quarter. Average gas production has risen from 4.5 million standard cubic feet per day (mmscf/d) during the first calendar quarter of the year to 12.6 mmscf/d during the second quarter.
I was also encouraged to see that cash received for gas sales rose by 92% to $9.8m during the last quarter.
Today’s update mentioned Victoria’s reassuring $14.2m cash balance, but did not refer to net debt, which was $6.6m at the end of November.
Unfortunately, there was no information on average gas sale prices, either. I suspect these have fallen over the last year.
The problem I have is that Victoria is very slow at publishing its accounts — last year’s results were published five months after the year ended. This makes it difficult to get an accurate picture of the firm’s finances.
Although Victoria is expected to report a profit this year and trades on a 2016 P/E of 5.5, I would wait for evidence of positive cash flow before buying.
Angle
Shares in small-cap medical tech company Angle fell to a low of 86p after markets opened this morning, before recovering to around 90p.
The firm, which is developing tests for cancer, published its preliminary results today. The highlights seemed positive, confirming that the firm will begin selling ovarian cancer test kits for research use this year.
In the meantime, the figures suggest that Angle should have enough cash to keep things moving for at least another year. In the year to 30 April, Angle reported cash outgoings of £3.8m, less than half the £8.4m cash balance reported at the end of last year.
So is Angle a buy? The company says that the ovarian cancer diagnostics market could be worth £300m per year, while the overall cancer diagnostic market could be worth £8bn per year.
These are big numbers, but Angle’s product has yet to prove its commercial appeal for even one type of cancer. The firm remains a speculative buy at best, in my view.