Proactive Investors - Run By Investors For Investors

Proactive Small Caps - ASOS fails to inspire market

Retailers, and their post Christmas numbers, have been in focus all week, big and small, so when online fashion group ASOS (LON:ASC), the largest junior on AIM, reports, small cap investors tend to take notice.
When ASOS reports, AIM investors sit up and take notice...
Retailers, and their post Christmas numbers, have been in focus all week, big and small, so when online fashion group ASOS (LON:ASC), the largest junior on AIM, reports, small cap investors tend to take notice.
This time the market was not very positive on the group, which although reporting sales jumping 27% in the four months to December, is seeing margins being depressed. 
Shares in the firm with a market cap of £2.5bn, slipped over 2% on Thursday following the trading update. 
Broker Cantor's experienced retail analyst Freddie George, noted that although earnings had declined over the last two years, and were set to improve this year, he reckons this is already priced into the stock.
Although up over 9% on the year, ASOS shares  are down 1.13% today at 3,012p and down  1.81% over the last seven days, mirroring the downbeat tone of the  AIM market generally this week.
The FTSE AIM 100 has dropped 0.46% today and is down almost 2% on the week to stand at 3,339.  FTSE AIM All-Share has shed 0.18%.
ASOS competitor (LON:BOO) , however, delivered a different story as it beat City forecasts with a 45% jump in UK  sales in the last four months. Total sales for the online firm were up 49% in a  big turnaround since the online group issued a profit warning a year ago.
Shares in Boohoo have risen 0.69% in the last seven days to stand at 36.75p.
Sticking to the retail theme, budget shoe seller Shoe Zone (LON:SHOE) this week laid bare the  challenges on the High Street, posting a  3.5% drop in sales last financial year, but cheered traders with the announcement of a special dividend worth 6p. 
Shares in the firm have added 3.22% on the last seven days to stand at 192.5p.   
In a week where markets have been anything but predictable, exploration in the Falklands came back on the radar.
AIM juniors Rockhopper (LON:RKH) and Falkland Oil & Gas (LON:FOGL), which are set to merge, rallied sharply on Monday after a new discovery in  the region was confirmed.
This was at the Isobel/Elaine project, where a new 14/20-2 well was a ‘re-drill’ of the prior abandoned Isobel Deep well.
Falkland Oil and Gas shares are up 16.44% in the last seven days to 8.56p, while Rockhopper has added 16.49% to 29p in the same period.
Other small oil groups, however, have been less fortunate. North Sea oiler Ithaca Energy (LON:IAE, TSE:IEA) revealed it expects to more than double production in 2016 to around 25,000 barrels and cut capital expenditure by 40%. 
But the market honed in on the plunging oil price, a delay to the Stellar project and North Sea worries generally, so the stock shed almost 22% on the week - to 18.75p.
It came after Tuesday, when energy titan BP (LON:BP.) said it was slashing workers at North Sea operations by a fifth - or 600 jobs, among a wider cull of 4,000 global positions.
A success story, however, was online video group Blinkx (LON:BLNX), which saw shares gain 16% on Thursday after it flagged up adjusted earnings for the third quarter were ahead of its expectations.
The company said investment in its core ‘mobile, video and programmatic’ capabilities had accelerated in the period.  Shares in Blinkx are down 5.06% today but rose over 10% on the week.
Elsewhere, wearable technology specialist CloudTag (LON:CTAG) said today it expects orders will flow from its debut at the CES ‘geekfest’ in Las Vegas as it announced it has raised £1.25mln in debt finance. The news failed to move the needle though, with shares unchanged at 2,125p.
Pawnbroker H&T (LON:HAT) has shares up 2.6% today, at 197p, though they are down 0.76% in the last seven days. On Tuesday, it reported what it called a "solid" trading performance for the year, which saw the pledge book increase by 1.3% to £39mln, compared to £38.5mln at the end of 2014.
Elsewhere, TyraTech (LON:TYR), the natural insecticide specialist, also saw shares gain over 8% on the week as it told investors it would launch a new line of non-toxic animal health biocide products this year, initially aimed at poultry producers and be distributed in the USA.

© Proactive Investors 2016

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.