In answer to your various questions GCM has a Stockopedia stock rank of 26, a quality rank of 15, a value rank of 43 and momentum 55.
Stockopedia doesn’t make recommendations, it calculates scores for quality, value, growth and momentum and combines these to come up with an overall stock rank. I tend to instantly dismiss any shares with a stock rank less than 20, as there are obviously problems of some description with it. It does save me a lot of time researching lost causes. You can read up how they are calculated on their website.
Below is Paul Scott ‘s assessment in yesterday’s Small Cap Value Report and yes it is listed on Aim.
Water Intelligence (LON:WATR)
Share price: 396p (up 10.0% today, at 08:19)
No. shares: 15.23m
Market cap: £60.3m
January corporate transactions & technology update
Water Intelligence plc (AIM: WATR.L), a leading multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water is pleased to announce a series of corporate transactions that reinforce its growth trajectory for 2019 and beyond.
Several actions re franchises are mentioned. I like the bit I’ve bolded below;
These transactions underscore that American Leak Detection (“ALD”) and UK-based Water Intelligence International (“WII”) business lines are complementary and growth is accelerating.
New product launch - this sounds intriguing, I’d like to find out more about this, to assess the potential scale of the opportunity ;
Formal launch of ORCA municipal sewer product into the United States following trials at a UK water utility
Trading update - it sounds like they’re not quite ready to put out FY 12/2018 figures, but give a positive steer;
A broader discussion will be set out in the next few weeks with a 2018 Trading Update that reinforces our previous strong guidance. The Company is currently closing its December franchisee royalty reporting on schedule.
Directorspeak - the Exec Chairman sounds very upbeat today. When management make very bullish comments, it’s important to check back and verify their track record - i.e. what did they say in the past, and how did reality actually pan out? Serial over-optimists are best avoided. I don’t know what the track record is like here, perhaps any readers who are more au fait with the company could comment on this?
Dr. Patrick DeSouza, Executive Chairman, commented: "We are off to a fast start in 2019. These transactions unlock significant shareholder value both from synergies and expansion into new offerings.
Water Intelligence is scaling operationally with multiple business lines and can execute such complementary transactions again and again going forward to reinforce sustainable growth - an objective that I have previously stated.
It is important to remember that given the size of the global water and infrastructure market that we are just at the beginning of creating significant shareholder value with a great company and brand. I look forward to updating the market on our 2018 results."
Bold words! Let’s hope it pans out as well as Mr DeSouza suggests.
My opinion - the share price already factors in a lot of good news - the PER is very high, at 33.6 times 2019 forecast earnings. That leaves no room for disappointment. Investors clearly like, and believe, the growth story. A PE rating in the 30s is getting into territory where investors are pricing in above expectations earnings growth.
It would be good to find out more about the new sewer product. If that has potential to become a major, highly profitable product, then the current PER looking high doesn’t matter.
Going back to my point in the intro, here’s a chart which dropped in the broad market sell-off, but should not have done so. Well done to holders who ignored the market’s background noise! How about this for a rebound;
This is a great example of how, in small, illquid shares, the chart can at times become completely detached from fundamental reality. Only traders dealing in the tiniest quantities, would have been able to sell, and buy back at the right times - and only then if they were lucky with regard to timing. Plus 2 lots of the wide bid:offer spread would make it hardly worthwhile.
This is why, if I’m absolutely certain about a company being a long-term winner, then I tend to just ignore the market price gyrations, and suffer the pain of any drawdowns.
I hope that helps,