Some share ideas

[WickedLester]

Now that the market has tanked I feel there must be some bargains to be had. The COVID-19 crisis will hopefully be over by the summer and things can return to normal.

Here's a few stocks I think are well placed to ride out the current storm and that will look cheap once this is all over.

Character Group PLC (CCT)

They describe themselves as "Designers, developers and international distributor of toys, games and giftware"

The current market cap is around £43.4m. Last year they made a pre tax profit of £11.1m and had net assets of £34.1m including net cash of £6.5 and net current assets of £29.1m. The current price is around £2 and last year they paid a dividend of 26p a share. They warned in January that Christmas was weak but they still expected to make a profit of £10m for the year. That forecast may now be nonsense but i've been wondering if with the schools on lockdown toy sales may not be as badly affected as other areas of retail. Even if this year is terrible I feel they have the balance sheet strength to ride out this crisis and once it is all over there is the prospect of a tasty yield in excess of 10%.

CMC Markets PLC (CMCX)

These are a provider of spread betting services. The market cap is around £427m. At the interim stage they reported a net profit of £27.5m and had net assets of £231m including net cash of £62m and net current assets of £199m. They have made a conscious effort to move to fewer high net worth sophisitcated investors and this strategy appears to be paying off. They actually guided upwards a couple of weeks ago, the current market volatility is paying off for them and they expect to exceed expectations this year. They pay a modest dividend but could easily afford to pay more if trading remains strong.

STM Group PLC (STM)

They are a financial services provider selling mostly QROPS (overseas pensions) and SIPPS. The market cap is around £11m yet at the interim stage they reported net assets of around £14m and net current assets of nearly £13m including £18m of cash. They warned at the end of last year but still expect to report an underlying pbt of £2.5m. There is some regulation/litigation risk and i'm not sure if the current maket malaise will hurt their fee income but with such a strong balance sheet they look well able to ride it out. They paid a dividend of 2p a share last year putting them on a historic yield of over 10%.

Anyway there's three companies I think are well placed to ride out the storm and reward patient investors.

[Midsmartin]

If you look at character group over the years, its very volatile in the long term. They are at the mercy of correctly guessing what's going to be fashionable next Christmas. Every so often they get it wrong and the price plummets. Unless their business has changed since I last looked at it.

[dealtn]

Now that the market has tanked I feel there must be some bargains to be had.

...but i've been wondering if with the schools on lockdown toy sales may not be as badly affected as other areas of retail.

Frontier Developments (FDEV) is the same play I have in my portfolio.

A successful developer of computer games, with a strong back catalogue of top selling product with repeat revenue opportunities, as well as new games coming on stream. I don't see much restriction on developers and coders who presumably can work anywhere online.

The slight issue is new games being launched in line with film releases etc. that have been delayed. From my understanding this might not be an issue, but would have been with "Jurassic Park", say, in the past. The next major release is a F1 tie-in, but that isn't dependent on the new season starting I would have thought. Indeed it might provide an alternative to that fan base currently deprived of a new racing season.

[WickedLester]

Frontier Developments (FDEV) is the same play I have in my portfolio.

I looked at FDEV but they look very highly rated to me already.

Anyway here is an interesting article from the Beeb about sectors which are doing better than average at the moment. Could be worth looking for ideas in these areas. I notice they say bike sales are booming which could have some read through to tiddler Tandem.

https://www.bbc.co.uk/news/business-52066454