Shifting Shares (27 May 2019) – Follow the leaders #EYE #EVRH #FEVR #FUTR

Shifting Shares (27 May 2019) – Follow the leaders #EYE #EVRH #FEVR #FUTR

News roundup

Pets At Home announced that it was performing ahead of expectations, and the stock reacted in earnest.

I’ll now watch to see how this responds, and might buy on the breakout of the retest.

Bidstack also announced the launch of somebody else’s game (Codemasters), and that they’ll be providing the native in-game advertising. It broke the key level I mentioned a few columns ago (or was it last week?) and now I’m looking for it to go higher.

Eagle Eye

The Eagle Eye chart is looking a lot better, but is still well off its highs. I spoke to the board at the Mello conference. The CFO seemed pleasant enough, but Tim Mason didn’t smile once – I resisted telling him my best Tesco joke! The company seems to be growing and they were adamant – too adamant, perhaps, that they won’t need cash. But when I checked the annual report, salaries were growing at a rate that suggests they’re happy being stakeholders rather than shareholders. I wouldn’t be tempted to invest.

This might be a little unfair, as the CFO has recently bought a load of stock, and Sir Terry Leahy has plenty too, but with this business I’ll trade any key level breakouts and wait for a self-sustainable business model instead of relying on the Barclays revolving credit facility and possible shareholder equity raises.

165p would be a level with a tight stop, with 185p being more significant.

EVRH

This stock is a private investor favourite (and was once a favourite of mine too) as it went on a move from .8p to as high as 19p before retracing all the way back down. They met their recent expectations and so, all things being efficient, the stock wouldn’t have moved – but it did, gapping down on large volume.

Next year’s revenues are set to come to £20 million. Yet nobody I know has a headset. Yes, they’re in bed with Facebook, and Oculus, but being long here on a downtrending chart seems like a gamble that someone will take them out. It’s finally time to take EVRH off my watchlist. There is no space for sentiment – a stock is either going to make me money or I won’t give it the time of day.

FeverTree (FEVR)

FEVR sliced through its 200 EMA support like a knife through butter. This is the problem with stocks that are well off their highs – there is no shortage of supply willing to dump into the rallies. The “I wish I’d sold at £40” crew are happy to take what they’re offered rather than have the pain of it tanking again whilst they’re still in it. It’s a lot of resistance to churn through – if FeverTree prints £40 again I’m interested. If it doesn’t – I’m not. It’s always worth following the leaders though so I’ll always keep an eye on this one.

I’m interested to see how Coca-Cola’s premium mixers go as they may even be pricing themselves higher than FeverTree. Will punters then assume Coke’s is better because of the premium pricing and flock to those? Or will they be loyal because of the taste? (I can’t taste the difference – I just hope @AstonGirl doesn’t read this).

FireAngel (FA.)

FireAngel has done very well from the recent placing, and they were also at Mello. The CEO was really selling to me about all the different products, and whilst it was nice of him to take the time to do so, a trader such as myself is not investing in the products. I couldn’t give a damn what the business does – product descriptions are nice for customers but not for me who literally just cares about the share price (and what is going to make it go up). He also didn’t want me to ask any questions, which was a bit of a red flag.

The FD fared no better. He told me he was very aligned as he bought £20,000 in the placing. I then asked him his salary – £170,000 per annum, which equates to about two months’ work. Aligned? I’m not so sure.

As some of you may have guessed, I do have low expectations of management. Mostly because self-motivated, entrepreneurial types are rare, and AIM is littered with lifestyle directors. Most of them couldn’t execute if they had their hand on the guillotine.

I’d be wary of buying the breakout here as the stock is going to run into the 200 EMA resistance very quickly. It’s one to watch though, even if I’m not a big fan of management.

Future plc (FUTR)

I love FUTR. It’s been so good to me, and has consistently performed with the stock responding as it should. I was at the Mello conference one morning when it opened, and I didn’t see that it had only slightly gapped up. What an opportunity missed! The stock began to re-rate and has gone on a storming run since the results. I still feel like there is more to come as so few people are talking about this stock, but I certainly wouldn’t blame anyone for banking their profit completely here. Such a move will warrant a pullback eventually, and my hope is that there will be plenty of punters secretly lining up to get long as they missed the initial move.

Gear4Music (G4M)

G4M looks like it could be starting a new trend. I’m not interested yet, but I note a French institution went from 5% to 10%. Clearly, not many are willing sellers at this level as both volality and volumes are low. That tells me that should the stock go on a run, many shares could well be sticky, rather than waiting to dump into the rise. You never know though, and I want to see the trend confirmed, ideally with some good results, before trying to capture a move here.

The week ahead

Altitude and Live Company Group I believe are due to report next week or the week after, so keep an eye out for those. Both are exciting growth stories, with strong entrepreneurial management backing. Rare stories, but if the price action doesn’t do what we want it to do, it doesn’t matter!

 

At the time of publication, the author has financial interests in shares discussed in this article.

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