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Tarsus Group (TRS)

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OLTB
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Tarsus Group (TRS)

#173043

Postby OLTB » October 11th, 2018, 3:17 pm

Afternoon all

Just added the above holding to my expanding portfolio of small cap shares - I now hold three :D

These are:

Tarsus (TRS)
1PM (OPM)
The Mission Marketing Group (TMMG)

Cheers, OLTB.

WickedLester
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Re: Tarsus Group (TRS)

#173064

Postby WickedLester » October 11th, 2018, 4:23 pm

I'd be interested to hear just what made you choose Tarsus, it looks shockingly expensive to me and doesn't really seem to have the growth to justify it. Also the balance sheet appears awful and cashflow nothing special.

The other two I can see the point of and have some OPM and did until recently have some TMMG (I sold because I was a bit overweight in small marketing firms and had made a reasonable profit).

This is not meant as a criticism by the way, I would genuinely be interested to hear what the attraction of TRS at the current price is.

Lester

OLTB
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Re: Tarsus Group (TRS)

#173075

Postby OLTB » October 11th, 2018, 5:02 pm

Hi Lester

I use Simplywall.st as a helpful tool and this indicates that the intrinsic value based on future cash flows should mean a share price of £3.32 as opposed to the current price of £2.65 ish. It also indicates good value based on earnings compared to the industry average although overvalued based on assets - your comment re debt is taken on board and I did note this before I bought but understand that they made a number of acquisitions funded by this debt. Their past use of assets has been efficient and ROE has exceeded 20%. The record of increasing dividends was appealing and well covered and it seems to be a very cash generative business (although this will have to cover the increased debt). Finally, I wanted a company that had Brexit protection and with EMEA and Asia being it's main markets, also found that ticked the box.

Cheers, OLTB.

monabri
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Re: Tarsus Group (TRS)

#173098

Postby monabri » October 11th, 2018, 6:35 pm

OLTB wrote:Hi Lester

I use Simplywall.st as a helpful tool and this indicates that the intrinsic value based on future cash flows should mean a share price of £3.32 as opposed to the current price of £2.65 ish. It also indicates good value based on earnings compared to the industry average although overvalued based on assets - your comment re debt is taken on board and I did note this before I bought but understand that they made a number of acquisitions funded by this debt. Their past use of assets has been efficient and ROE has exceeded 20%. The record of increasing dividends was appealing and well covered and it seems to be a very cash generative business (although this will have to cover the increased debt). Finally, I wanted a company that had Brexit protection and with EMEA and Asia being it's main markets, also found that ticked the box.

Cheers, OLTB.


As you know OLTB, I also use SWS as a simple screening tool. I'd urge caution though as I've found it isn't always reliable. A good example would be AIM: CAKE ( Patisserie Valerie)!... Or BATs 11.9 x dividend cover.

Check TRS's forecast earnings though ( TRS Future Performance) -this might put pressure on the dividend payment going forward. One would think that the acquisitions (which you say is the reason for increased debt)would increase earnings but this is not indicated.

Maybe a check with a second source?

Was TRS a J Baron suggestion?

Cheers, Monabri.

( Maybe have a look at the ROCE ' dial' which is titled 'return on capital'.)

OLTB
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Re: Tarsus Group (TRS)

#173223

Postby OLTB » October 12th, 2018, 10:16 am

monabri wrote:
OLTB wrote:Hi Lester

I use Simplywall.st as a helpful tool and this indicates that the intrinsic value based on future cash flows should mean a share price of £3.32 as opposed to the current price of £2.65 ish. It also indicates good value based on earnings compared to the industry average although overvalued based on assets - your comment re debt is taken on board and I did note this before I bought but understand that they made a number of acquisitions funded by this debt. Their past use of assets has been efficient and ROE has exceeded 20%. The record of increasing dividends was appealing and well covered and it seems to be a very cash generative business (although this will have to cover the increased debt). Finally, I wanted a company that had Brexit protection and with EMEA and Asia being it's main markets, also found that ticked the box.

Cheers, OLTB.


As you know OLTB, I also use SWS as a simple screening tool. I'd urge caution though as I've found it isn't always reliable. A good example would be AIM: CAKE ( Patisserie Valerie)!... Or BATs 11.9 x dividend cover.

Check TRS's forecast earnings though ( TRS Future Performance) -this might put pressure on the dividend payment going forward. One would think that the acquisitions (which you say is the reason for increased debt)would increase earnings but this is not indicated.

Maybe a check with a second source?

Was TRS a J Baron suggestion?

Cheers, Monabri.

( Maybe have a look at the ROCE ' dial' which is titled 'return on capital'.)


Hi monabri and thanks for the info above - the investment is very small so I'm not that concerned (or am I just trying to kid myself!). Maybe I should have topped up OPM as it seems cheaper now. TRS wasn't a J Baron suggestion, but one from Lord Lee - as you know, the HYP is all UK and I wanted something away from the UK and so seeing that the main markets of the business are in Middle East/Far East thought it was worth a (very small) punt after looking at SWS (I hope they update the CAKE info soon!). As with my HYP, I won't sell these small caps, but just let them run and see what happens. If they all go pop, I won't be jumping out of the window, just a little miffed.

Cheers, OLTB.

OLTB
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Re: Tarsus Group (TRS)

#204202

Postby OLTB » February 27th, 2019, 9:49 am

Morning all

Tarsus results announced this morning here https://www.investegate.co.uk/article.a ... 700042025R

All looks good with a 10% increase in dividend and share price up just over 4% this morning.

Cheers, OLTB.

OLTB
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Re: Tarsus Group (TRS)

#224154

Postby OLTB » May 24th, 2019, 9:28 am

Morning all

One of my small caps will be leaving me - a bid for Tarsus at a 36% premium to share price has been made by Charterhouse Capital Partners LLP and accepted. I will also receive the final dividend as declared at the recent AGM. Details here https://www.investegate.co.uk/article.a ... 700070673A

Good news as it has made me some money, however, it was on my potential top up list :roll:

Now the search starts for a replacement small cap...

Cheers, OLTB.

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Re: Tarsus Group (TRS)

#224163

Postby monabri » May 24th, 2019, 9:42 am

Nice ! :lol:

OLTB
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Re: Tarsus Group (TRS)

#224167

Postby OLTB » May 24th, 2019, 9:48 am

Thanks monabri

It's nice to see a blue figure on my recent sea of red!

Cheers, OLTB.

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Re: Tarsus Group (TRS)

#224303

Postby WickedLester » May 24th, 2019, 9:44 pm

Now the search starts for a replacement small cap...


Congratulations on Tarsus.

My suggestions for a couple of interesting small caps are:

1) Triad PLC (TRD). They supply a lot of IT staff to the Government and the market cap is only about £6m yet they have nearly £4m in net cash and look good for a net profit of £1m this year. They told me that Brexit was essentially neutral for them but the price was hammered after a major shareholder tried to take them to court over some historic dispute (she lost). I don't know what the outlook is for them going forward but they look cheap to me at the moment.

2) Omega Diagnostics PLC (ODX). There are essentially three businesses here. Food Intolerance which makes an operating profit of around £3m per year and is growing (I also believe that this business will be sold soon due to pressure from the major shareholders, Chris Mills and Richard Sneller), CD4 which is commercialising a novel POC test for advanced HIV and an Allergy business which is of dubious value.

The market cap for the whole is just around £13m yet I believe Food Intolerance alone is worth in excess of £20m and the CD4 business is approaching scale commercialisation and is targetting sales of around 5m units a year at $5 a time and 60% gross margin through NGO's.

If i'm right and Food Intolerance is sold soon (this was the impression I got from speaking to the ex Chairman) I believe some cash will be returned to shareholders and some kept back to fund CD4 through to launch.

The board have said that they believe the sum of the parts is worth substantially more than the whole and in this instance I would agree with them.

This is now my largest holding.

Lester

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Re: Tarsus Group (TRS)

#224305

Postby OLTB » May 24th, 2019, 10:09 pm

Many thanks Lester and I really appreciate your thoughts and suggestions.

I have until September (I think - they mention that they want to get everything tied up by the third quarter) so I've got some time to have a good think. I have not come across those companies you mention so I'll have a bit of a dig!

Cheers, OLTB.

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Re: Tarsus Group (TRS)

#228216

Postby WickedLester » June 10th, 2019, 7:45 am

Triad's results are out today and they show a net profit of nearly £900k plus net cash of £4.6m. Currently yielding around 7% with a 3p dividend for the year.

The market cap is still under £7m which makes these look absurdly cheap to me assuming they can continue to perform at these levels.


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