You may have spotted that I bought more Netplay TV (Epic code NPT) back on Monday 21st March 2016 at 9.75p. The Company is best known for the ‘SuperCasino’ show it runs on ITV and Channel Five late at night but it also has other Online Gambling websites, including a Sports Betting bit.
I have held this Stock for a couple of years but never put much money into it as it is a low Market Cap and had some trouble over the introduction of the Gambling ‘Point of Consumption’ Tax (POC) and the new regulatory environment for Online Gambling Companies.
Regular Readers and Tweet sufferers will know that I have been very inactive this year - Markets got off to a horrible start and with the Brexit Vote not far away, I am very reluctant to take positions on the Long tack - so my topup on NPT illustrates my level of conviction. I have been stalking NPT for a topup for months and months but the Chart was always uninspiring and the recent Results were a bit mixed so progress was hard to nail down. However, on the morning of Monday 21st March 2016, NPT put out a ‘Final Results’ RNS and they also announced a Special Dividend that Shareholders will receive if they hold the Stock on the 18th May 2016 (it goes ex-dividend on the 19th May and the Record date is the 20th May - in essence you need to hold the Stock on 18th May to qualify), which amounts to 0.68p but there is also a Final Dividend of 0.34p - totalling 1.02p.
Having seen the Divvy announcement, I quickly worked out that it amounted to nearly 10.5% of the 9.75p I paid - so, in effect, I have only paid 8.73p - because I will get a ‘Cash back’ in June.
Normally I would bide my time and make a Buy Decision ‘Out of Hours’ so that the swings and gyrations of the Market do not overly influence my emotions and I can be calm and rational - however, I broke my rule here because it seemed obvious to me that people had not picked up on this and after I bought the Shares continued to rise by about 13% on top !!
I mentioned on Twitter that I am quite looking forward to writing this Blog. I haven’t written a ‘Buy rationale’ one for ages and I feel like getting really stuck into this one - so hopefully I can do a decent job of it. There is huge potential upside on NPT and I feel no great need to rush out a scrappy Blog, so I will take my time and try and be pretty comprehensive. I am thinking of buying more NPT and doing this will help clarify my thoughts on buying even more. Currently I have just under 2% of my Portfolio Exposure in NPT - I could easily up this to 3%.
I was in the boozer the other day with my mate discussing the merits of Behavioural Psychology with regard to Investing, building on my recent reading of Daniel Kahneman’s superb book, ‘Thinking, Fast and Slow’ (available in Wheelie's Bookshop and good Bookshops) and an upshot of our chat was that when I write these Buy Rationales, I will try and put more emphasis on the Risks and I will also try to put these higher up the order of Sections - although of course I need to do a bit of an Introduction first or the Risks won’t really make a lot of sense.
We both had the thought that when you read ‘tips’ and stuff in the usual sources, they very rarely emphasise the Risks involved and the potential Downsides - I think it is critical to understand these aspects of any Investment and the psychological affect of just putting out a glowing Argument to Buy a Stock can really impact Readers in a bad way.
The thinking here is that we all suffer from a Cognitive Bias (brought about by our ‘Fast Brains’) whereby our First Impression is very deep and difficult to overcome. By starting off on the Stock in a positive way, I am implanting on Readers a favourable First Impression and this could cloud judgement. By putting Risks more up front, hopefully this will help to soften this bias.
- The mysterious ‘Otherside Inc.’ acquisition.
- Further Regulatory and Tax changes.
- Involvement of Teddy Sagi - good and bad.
- Reliant on key relationships with ITV and Channel Five.
- NPT has £10.8m Cash and there is a Risk this could be misspent.
- Continuing and effective Product Development of Apps and Websites is very important.
- Various elements of ‘Reputational Risk’.
NPT describe themselves like this on their Website - seems about right:
“NetPlayTV is the UK's largest interactive TV gaming company. We use our extensive knowledge of creating profitable games with our proven ability to create great TV show formats. Applying this unique combination, we develop highly successful brands that people can play on TV, online and on their mobile.”
NPT has 3 main Brands:
- SuperCasino.com is the Flagship Brand and is available via the Web, via TV on Channel Five every night and Sky Channel 862 every day, with Live Broadcast and via Mobile. NPT claim in their Marketing blurb that “It's as close as you can get to a real casino experience at home!”
- Jackpot247 is broadcast with live presenters on ITV 6 days a week, 24hrs a day and on Sky Channel 862. Customers are able to play a range of casino games, including live TV roulette, a huge variety of branded slots as well as some of the mega jackpots offered by PlayTech. Originally known as Challenge Jackpot, Jackpot247 was launched in 2008 by Two Way Media and Virgin.
- Vernons is a well established brand (been around since 1925) offering Bingo, Casino and a Sportsbook. While it has reinforced its dependable reputation and enjoyed a high profile presence on the internet for several years now, Vernons was already a reliable and trusted name in gaming long before the computer age dawned (you can tell I copied that bit of waffle from their Website !!)
In August 2015, NPT bought ‘Otherside Inc.’ which is an Online Marketing Agency - more detail is provided on this in the ‘Company History’ Section later in this Blog.
The corporate Website can be found here:
The Gaming Websites are here:
You gotta check out the Presenters - lots of Hunks for the Girls and Totty for us Blokes !!
The ‘Point of Consumption’ (POC) Tax was introduced in 2015 and is a levy on the Revenues that Gaming Companies take from their Punters. Along with this Tax came a new Licencing Regime which in effect made it illegal to operate in the UK Market without being Licenced and paying the POC Tax. This hit the NPT Share Price hard as it was very uncertain what the impact on Profits would be - the same happened with 32Red TTR.
In practice, NPT reduced its Marketing Spend with regards to attracting New Depositing Players and put a lot of effort into focussing that Spend better. With illegal Online Offerings exiting the Market, it turned out that NPT have achieved a very high Growth Rate and also reduced their Costs !! Note, a similar thing happened at TTR. So both these companies are benefiting from introduction of the POC Tax which is certainly not what anyone predicted.
On Monday 29th March 2016, 32Red TTR got hit hard, down 9%, following an article in Shares Magazine that covered a part of the recent Budget where Ozzy Osbourne is going to apply the POC Tax to ‘Free Spin’ promotions and “get a £10 Free Bet” kind of things. Strangely NPT did not get hit by this but actually rose - however, I would expect it to apply to NPT also. On balance, this will be a Sector-wide issue and I expect other Marketing Ploys to be used to try and attract new Punters if such temptations become unfeasible.
- NPT is quite a small Company, with a Market Capitalisation of about £31m and it is very much a ‘Penny Share’ priced at just over 10p and these factors themselves bring in Risks such as wide Dealing Spreads; lack of Analyst Coverage (note, Simon Thompson in the Investors Chronicle covers NPT); few Institutional Buyers as many Funds are constrained from investing in Small Companies due to their Mandates; and NPT is not a share that lends itself well to many Technical Analysis techniques - it is pretty choppy.
- As was clearly shown by the POC Tax, the Regulatory Environment can have a huge impact on companies in the Gambling Sector. However, because the POC Tax and new Licencing Rules have only just been introduced, it seems most likely that Gambling Companies will be left alone for a bit - although I did see that the Government was looking at FOBT (Fixed Odds Betting Terminals) again, which may impact the likes of William Hill (WMH) and Ladbrokes (LAD) but will not be an issue for the Online only Gambling Companies.
- Teddy Sagi, the Entrepreneur involved in Companies like Playtech (PTEC), Market Tech Holdings (MKT) and Safecharge (SCH) has a Holding in NPT Shares and this could be a negative in that he might exert an influence on the Company that is not in the interests of other Shareholders. However, to be fair, I have not seen evidence of this at his other businesses. There is also ‘Upside Risk’ here where maybe Teddy Sagi will launch a Takeover Bid for NPT via another of his Vehicles - perhaps via PTEC. Obviously this could be very nice but there is a Risk that he gets it on the cheap and existing Shareholders lose out. I see significant upside potential for NPT and I would like to grab as much of it as I can !!
- “SafeCharge Limited is a company related by a common significant shareholder (i.e. Teddy Sagi). During the year the Group expensed £531,277 (2014: £618,728) of fees in relation to payment processing services provided by SafeCharge Limited. At 31 December 2015 SafeCharge Limited held pending customer funds of £675,012 (2014: £1,006,111) payable to the Group.” This text is from Note 29 in the Annual Report 2015 - there is a link later in this Blog. The implication here is that a Major Shareholder in NPT has a Stake in a Business which supplies Services to NPT - there could be a potential Conflict of Interest.
- The Global Economy has been limping out of the ‘Great Recession’ from around 2008 and it is by no means a convincing Recovery, and it has been very much aided by Central Bank policies which are verging on pure lunacy. The problems across the World are numerous and there must be a fairly high chance that a Global Slowdown could happen in coming Years (if not sooner !!). Obviously this could hit NPT’s Customers in the pocket and reduce their Discretionary Income to blow on Gambling - although of course Gambling is pretty addictive and maybe it won’t hurt NPT too much. Of course, a Global Economic issuette would be a problem for pretty much all Stocks - so it is an argument not to invest in Stocks, rather than a case to avoid NPT. The upcoming Brexit Vote could also be a drag on NPT and Stocks in general.
- NPT is in the lovely position of having about £10.8m in Cash - however, this runs the Risk that they do some duff Acquisitions and these go badly wrong. As long as they stick to small ‘Bolt-on’ buys then this should be manageable, but it is a Major Risk and time after time we see Acquisitions go horribly wrong - although these are particularly bad when we get the huge ‘Mega-Mergers’ of Major Blue Chip Companies. NPT recently got involved in the bidding for ‘The Football Pools’ but pulled out of it when other Players got involved - it was great that they withdrew when the Deal looked less attractive, but the Risk was that this would have been a very large Acquisition and I would prefer it they stuck to smaller purchases that are relatively easily integrated.
- NPT is obviously very dependent on its relationship with ITV and Channel Five - the history here is very good and the ITV contract was recently extended to 2019 and the Channel Five one to 2018, but of course there is a Risk that things could go badly wrong here.
- There is some Risk around the Otherside Inc. deal that needs to be considered. If you have a look at the ADVFN.com Bulletin Board for NPT there is a lot of discussion about the nature of Otherside and many Posters have made the point that they cannot find much, if any, information about the Company. I have spent a small amount of time looking into this and doing some simple Google Searches and not really found much - the main outstanding bit is who were the Owners from which Otherside was bought? It seems possible that it was a deal connected to the Directors of NPT and this would be a bit fishy but I can see no evidence to back this up - just conjecture (Red Herrings again !!). Another strange thing is that in the recent Results NPT states that they did not buy the “Branding or Website” of Otherside, so it makes you wonder what they did buy !! My view on this is that the Stock is sufficiently cheap and has a huge Cash Buffer so there is a sizeable ‘Margin of Safety’ - but of course if it came out that there was something dodgy about this deal then it would hit the Share Price hard. Otherside Inc. is also registered in Belize which of course gets people worried - but that is not really all that unusual in these ‘Tax minimisation’ days and NPT itself (along with countless other Gambling Companies) is Tax Domiciled in Alderney on the Channel Islands.
- The following text is from the Annual Report 2015: “Foreign exchange risk arises because the Group has assets and liabilities denominated in sterling, euros, US dollars and Israeli shekels. The Group’s policy, where possible, is to settle liabilities with cash generated from operations denominated in the same currency. The Directors receive a daily summary of cash balances held in each currency and regularly monitor the foreign currency risk exposure.”
- NPT’s whole business is very dependent on them being able to keep their Websites and Apps etc. at the leading edge of Gambling Sites - if they fall behind in Product Development and get out of date then this could impact on the fortunes of the business.
- All Gambling Companies have issues with ‘Problem Gamblers’ and kids who are under 18 trying to play (this is illegal) - NPT is clearly aware of this Risk but if something goes wrong with the ‘onboarding process’ then the Company could suffer from an adverse hit to its Reputation. An example of this kind of thing was when Plus500 (PLUS) had issues around how they bring in new customers - although of course this was for Financial CFD Trading.
- In a similar way to the above bullet point, NPT could suffer if it has a Security Breach where Customer Data or Payments Data leaks out or is hacked. The Company clearly recognises this as a Risk.
- The way NPT’s Casino Games work is that there is a bias towards ‘the House’ and NPT shouldn’t be able to lose over longer time periods - but in theory Results could go against the Company for short periods. I guess this is a Risk facing all Gambling Companies where they are taking a side against their Customers. Yes, sorry to break it to you that Casinos are rigged - remember that next time you are in Vegas trying to recreate the ‘Hangover’ movies….
Page 7 of the Annual Report 2015 lists the Company’s view of ‘Principal Risks and Uncertainties’ - these are worth a look - there is a link further down this Blog. It is particularly good because it lists the ‘Risk Description and Potential Impact’ on the left hand side and then has ‘Current Mitigation’ on the right hand side - well worth a look.
Needless to say this is a long list of Risks but I wanted this section to be pretty comprehensive. My own approach is to weigh up the Risks and size my Positions accordingly - Readers will no doubt have your own methods of Risk Management (such as Stoplosses).
NPT is AIM listed with the EPIC Code NPT. NetPlay TV plc is incorporated in England (Registration Number 3954744) which is also its main country of operation.
NetPlay TV plc
80 Silverthorne Road
London SW8 3HE
Tel: +44 (0)20 7819 9100
Fax: +44 (0)20 7819 9199
55 Baker Street
London W1U 7EU
Nominated Advisers (NOMAD):
Shore Capital & Corporate Limited
Bond Street House,
14 Clifford Street,
London W1S 4JU
Can be found here:
Financial Calendar - dates for Exdiv and Results etc. can be found here:
NetPlayTV plc was listed on The London Stock Exchange, Alternative Investment Market (AIM) in April 2001. The Company was established in 2000 to develop and market a complete range of mass-market entertainment and information products through IVR (Interactive Voice Reponse), SMS (Subscriber Messaging System - texts), online and offline.
In December 2006, the Group underwent a significant change when the fixed line telephony business was sold and the TV gaming business was acquired. NetPlayTV has a strong marketing led focus backed by an extremely strong technical team.
Vernons was acquired in October 2013.
In August 2015, NPT bought ‘Otherside’ which is an Online Marketing Agency. This brought to the company specialist staff and an Online Media Platform which enables NPT to take more control of its Marketing activities - this is a big contributor to the reduced Marketing Spend and increased effectiveness enforced since the POC Tax was introduced. In addition, NPT expects to benefit from diversification of its Revenue Streams as Otherside grows its business.
Something to be aware of here is that NPT did not buy the Otherside Branding and Website - this is mentioned in the Final Results that came out on the 21st March 2016. I am pretty sure I read somewhere that Otherside was bought from a Director of NPT but I have not cleared this up and I can see nothing about this in the Accounts - it is something to be aware of as such transactions can often be rather ‘undesirable’. Check out my ‘Risks’ Section for more coverage about this Otherside deal.
Bjarke Larsen, the CEO, describes the Otherside acquisition with these words in the 2015 Annual Results:
“The acquisition in August 2015 of the trade and assets of Otherside, a specialist online digital marketing, product development and technology company, has provided a complementary and profitable revenue stream whilst adding to our capability in driving traffic to NetPlay TV's brands. These assets included a proprietary media platform, which is best described as a Demand Side Platform (“DSP”). This DSP allows our media buyers to manage multiple ad and data exchanges, of which we have over 100, through a single interface. The DSP allows the team to build campaigns for our partners and efficiently manage bids and pricing for the media we are buying.
The B2B offering generates revenue on a CPA* (Cost per Acquired Customer), revenue share or hybrid basis for a number of companies
across a wide range of sectors. The acquisition has proved a valuable addition to the Group and we are confident that this offering will go
from strength to strength as we start to take advantage of a number of additional opportunities, including increasing contributions to our B2C business over time.”
* CPA is calculated as aggregate marketing expenditure divided by the total number of new depositing players
I have simply included a few Major Milestones for the Company here - for more details Readers will probably need to go through the Archives of NPT RNS News Items which are easily accessible via the NPT website at
- Bjarke Larsen, Chief Executive Officer - has worked for NPT since January 2007, joining as casino campaign and account manager. He has progressed through a number of roles during his time with the business, serving as project manager and head of products before being chief operating officer (COO) of the group’s subsidiary NetPlay TV Group Ltd., where he was responsible for overseeing the acquisition and integration of the Vernons.com brand from Sportech. Bjarke joined the PLC board in August 2014 as Commercial Director before being appointed as CEO in January 2015.
- Akshay Kumar ACA ACIS, Group Finance Director - Prior to his appointment as a Director of NPT, Akshay served as Group Financial Controller of the Company since January 2011. Prior to this he was Financial Controller at Sporting Index, the sports spreadbetting specialist. Has over seven years' experience in the betting and gaming sector.
Some limited details on the Directors can be found here:
The following numbers are taken from the Annual Report 2015 and do not include any changes after this date - if Readers want to look through and work out the changes since this then feel free !!
- C A N Butler - 3,100,000 Ordinary Shares
- A Kumar - 310,400 Ordinary Shares
- A C Lapping - 3,790,184 Ordinary Shares
- B J L Larsen - 105,333 Ordinary Shares
- T S Mickley – nil
- G P Stevens - 431,667 Ordinary Shares
- Total - 7,737,584 Ordinary Shares
From the Annual Report 2015 and as at 15 March 2016, the following had interests in 3% of the total voting rights of the Company:
- Directforce Trading Limited - 83,112,768 Shares, 28.02%
- Henderson Global Investors - 41,662,237 Shares, 14.04%
- Schroder Investment Management - 20,785,938 Shares, 7.00%
- Slater Investments - 12,540,000 Shares, 4.22%
- Shareholdings beneath 3% - 138,509,619 Shares, 46.72%
I am really happy to see Slater Investments here - Mark Slater is arguably the sharpest Small Cap Fund Manager and is the son of the Legendary Jim Slater, who sadly passed away recently.
Directforce is the Teddy Sagi vehicle and clearly he has a chunky Shareholding so can exert considerable influence on the Company.
An up to date list of these Shareholders can be found here, in case you are reading this Blog long after I first published it !!
On 21st March 2016 NPT issued Final Results for the Year Ending 31st December 2015. The bits that stood out to me are:
- 17% increase in new depositing players to 88,551 (2014: 75,687).
- Net revenue of £26.3m (2014: £27.4m).
- Adjusted EBITDA[*] of £2.7m (2014: £3.6m) which is at the top end of market expectation after incurring betting and gaming duties of £3.8m (2014: £0.5m).
- Cash and cash equivalents at 31 December 2015 of £13.0m (2014: £14.2m) after paying £2.6m in respect of the digital marketing business acquired in the year and £1.6m dividend paid.
- Strong start to 2016 with 26% increase in new depositing players and 16% increase in active depositing players over the same period in 2015.
- For 2016 so far, 18% increase in total net revenue over the same period in 2015.
The horrible ‘EBITDA’ (Earnings before Interest, Tax, Depreciation, Amortisation) is quoted throughout the Statement and many Investors will be put off by this. I see no need to get hung up on it, the bit I have focused on is in the “Cashflow” statement where they talk about £2.110m of “Net Underlying Cashflow” and I base my Valuations on this figure.
To give a taster, if you strip out £10.8m of Cash that is NPT’s from the current Market Capitalisation of a shade under £31m, you get a Price/Cash Earnings Ratio of 9.6 (31 - 10.8 / 2.11). As an aside, I must say I like doing a Ratio like this - it is much more ‘pure’ in terms of actual earnings than the hugely ‘adjusted’ figures we tend to get in Company Statements these days.
The Revenue is down because growth in this Sector is very much driven by Marketing Activity (and therefore Marketing Spend) - this passage helps explain this situation, but it is worth noting that for 2016 so far, Net Revenues are up 18%:
“Total marketing expenditure for the year was £9.4m (2014: £12.9m) with B2C Marketing expenses decreasing by £4.2m to £8.7m. This expenditure reflects the effect of the revised marketing programme which was launched in late-2014. These expenses include the cost of the revenue share agreements in respect of key broadcast agreements with ITV and Channel 5. We are pleased to see that the revised marketing strategy we adopted at the end of 2014 is working as we successfully reduced marketing expenditure by 32% with only an 8% fall in net revenue. Our CPA, on our casino-only brands, decreased by 20% from £208 in 2014 to £166 in 2015 as a result of increased efficiencies.” (CPA is Cost Per Acquired Punter).
This comment here from the CEO is interesting:
“NetPlay TV continues to have a very strong balance sheet and remains highly cash generative, giving the Board continued confidence that the Group is well positioned to pursue not just bolt on opportunities but also more transformational deals, taking advantage of the organic growth and M&A opportunities that lie ahead.”
I say this because it is clear that NPT is considering more than just mere small ‘bolt-on’ acquisitions - this of course has a double-edge - poorly executed acquisitions can go horribly wrong, but on the flipside, a truly ‘transformative’ deal could see a big jump in the Share Price.
On the morning of Monday 21st March 2016, NPT put out ‘Final Results’ and they also announced a Special Dividend that Shareholders will receive if they hold the Stock on the 18th May 2016 (it goes ex-dividend on the 19th May and the Record date is the 20th May - in essence you need to hold the Stock on 18th May to qualify), which amounts to 0.68p but there is also a Final Dividend of 0.34p - totalling 1.02p. This means new Shareholders can buy the Shares before the 19th May 2016 and still pick up the 1.02p of Dividends, which equates to nearly 10% on a Share Price of 10.38p.
I think the Dividends are due to be paid on the 9th June 2016. The Special Divvy will use £2m of the Cash Pile and the Normal Divvy being paid out as well will use another £1m.
Recent Director Dealing
Since the ‘Final Results’ and ‘Dividend Declaration’ on the 21st March 2016, there have been several Director Deals:
- 21 March 2016, Andrew Lapping, NED, bought 250k Shares at 10.25p.
- 21 march 2016, Charles Butler, Non-Exec Chairman sold 1m Shares at 9.75p.
- 23 March 2016, Graham Stevens, NED, bought 90,820 Shares at 11p.
- 24 March 2016, Andrew Lapping, NED, bought 144k Shares at 10.45p.
It is interesting that a few Directors were buying whilst another Director was selling a large amount. My view on this is that Directors can often have reasons other than Valuation etc. that motivate their selling - for example, Divorce, new House purchase, Diversification reasons, other business interests etc. Charles Butler still has 2.1m Shares so he has a pretty sizeable holding.
With ‘Buys’ there are far fewer reasons - in fact, I would guess there are mainly just the two:
- The Directors think the Shares are good value.
- The Directors are deliberately trying to prop up the Share Price after a Profit Warning.
Obviously in this case it is unlikely to be the latter motivation to Buy !!
Sadly I do not have any forecast figures to go on - due to the size of the Company I don’t think it is getting much (if any) broker coverage. Therefore, I will need to work on the numbers we already have - which is arguably a better method anyway.
You may remember me mentioning earlier that if you strip out £10.8m of Cash that is NPT’s from the current Market Capitalisation of a shade under £31m (at the Mid Price today of 10.38p), you get a Price/Cash Earnings Ratio of 9.6 (31 - 10.8 / 2.11). Note - I am understating the numbers here, in reality some of the Cash Pile (in total £13m) is included in the Market Capitalisation but it belongs to Customer, not NPT - so I am being very conservative and arguably I could have stripped out the full value.
So far the Company has got off to a strong start to the Year and I think it would be nicely conservative to assume that NPT can achieve 10% growth in its ‘Underlying Cashflow’ that was mentioned earlier - this would give a figure of £2.32m. On today’s Mid Price of 10.38p, that would give a Price/Cash Earnings Ratio of 8.7 (this is after stripping out the Cash). This looks cheap to me.
But of course this does not allow for any growth from future Acquisitions - so with growth of just 10% I think I am probably very understating what the Company could realistically achieve.
Another way to consider this is via the Dividend Yield. This year just gone, the Company is paying a Normal Dividend in total of 0.56p according to ShareScope. On a Price of 10.38p this is a Dividend Yield of 5.4% - pretty chunky. If we project forwards, it seems reasonable to think the Divvy might get raised to perhaps 0.6p - if so, this would give a Forward Dividend Yield of 5.8%. Note, these numbers do not include the Special Divvy.
As I mentioned, the Numbers in my ‘Valuation’ section are pretty conservative but it seems realistic to me that if NPT can keep steadily delivering over the next year or so, then it would be fair to Value the Company at 15 times its Historic Cashflow - this would give a Target Price up around 14p (trust my maths on this !!).
If we were to value it on the Cashflow Projection I made of 2.32m and put on a Ratio of 15, we would get a Target of 15.5p. This is nearly 50% upside on the current Share Price of 10.38p. At 15.5p, the Historic Dividend Yield would be 3.6%.
Of course these don’t allow for any growth from future Acquisitions and I think my numbers are pretty conservative. Allowing a bit for decent Bolt-on Buys might enable a Target around 17p.
From a Charting viewpoint, here’s the Chart going back 15 years - as you can see, NPT is very much near the bottom of its Long Term Chart.
Those Charts in the ‘Target’ Section give a taster, here are some more Chart bits. The Chart below goes back to the end of 2013 and clearly the NPT Share Price got itself into a Downtrend Channel which is marked by my Red Parallel Lines.
Around April 2015, the Price got out of the Downtrend Channel and maybe now we are in more of a Sideways Range, as I have marked with the Parallel Black Lines - although of course my Top Line is a bit rubbish here as it only has 1 ‘touch point’ - call it ‘Poetic WheelieLicence‘.
Obviously it needs to breakout over about 12p for us to be confident it is going much higher.
I won’t go into further detail, but I get the feeling the Share Price could pull back for a bit after the recent jump up on the Results, Special Divvy and Director Buying - however, I am sure Buyers will emerge again soon enough as they will want to get in before the Ex-Div Date on 19th May 2016.
As with almost all Stocks I buy, I am looking at NPT as a Long Term Play and expect to be holding it for a few Years - I reckon it can keep delivering a nice Dividend and growth can come organically and especially by Acquisitions - these factors should drive the Share Price up over time. NPT has started 2016 very strongly and it seems likely they can have a very successful year, despite the introduction of the POC Tax.
I very much see this as a potential repeat of what happened at 32Red TTR which was a Stockmarket Darling last year once people had woken up to the Story. Obviously there are Risks but it looks very good value around the current Mid Price of 10.38p and with recent Director Buys and Mark Slater on board, the gamble looks pretty favourable.
With 1.02p of the Share Price being given back via the Special Dividend in June, it seems a pretty good time to be buying into what looks like a pretty undervalued situation. I am looking for 18p here but I am a patient chap and will be happy to hold for a long time and to milk it as much as I can.
Hope you liked the Blog, it has been really nice to write a ‘Buy Rationale‘ after such a long layoff, regards WD.