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Sosandar – in two minds as we approach the AGM

By Flip Flop Nigel Somerville | Thursday 13 September 2018

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Shareholders in AIM-listed Adam Reynolds stable Sosandar (SOS) have an AGM to look forward to next Tuesday, and I am very hopeful that a trading update will accompany proceedings. At the last count the company reported quarter on quarter growth of 70-odd percent – a remarkable achievement, even for a near start-up. The market is clearly hoping for more of the same, although I’m not sure that rate of growth will have been repeated over the summer holidays. But it has been growing like mad – and we loyal shareholders have done very well.

Shore Capital reckoned a fair share price is 50p and forecast full year turnover for this year of £3.9 million (an impressive uplift from last year’s £1.3 million). I wonder if that might be a bit low, but have no expertise in fashion-related matters so I’ll just have to wait and see. What I do know is that the shares are surging higher once again – currently up at around 45p (last seen), taking out the previous closing high. So the market is positive.

My own position is that I am looking to offload another tranche of shares at above 50p – although next Tuesday may see me revisit that. The problem is that news on Tuesday could be less exciting than people hope, and the shares could come down as a result. On the other hand more blow-out numbers will be well rewarded. Oh, what to do?!

I don’t know which way it will go, but I do sense that the shares are pricing in good news. Right now, whilst I can hope the company will trade profitably towards the end of its financial year, it is all guess work – and the market cap is £48 million even before management options etc are taken into account. So I will stick with my plan to sell another tranche at above 50p if we get there ahead of Tuesday. That way I can enjoy the gains (again!) but will have enough still in the shares to enjoy any further rally. And, of course, if they drop I can buy more at a cheaper price.

What I will not be doing is selling out altogether – not yet, anyway - because I am hoping for a long climb from here and I believe this is a good company in the making. I have been delighted with the progress so far and don’t want to miss out. But I do want to continue to cash in some gains along the way. It is a policy which has worked very well for me so far. So I’m watching like a hawk. If we see 50p ahead of Tuesday I’ll be offloading another tranche to leave a useful slug in for the ride.

Fingers crossed!

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