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The ShareProphets share tips of the year 2020 - No 10 a buy from Steve Moore

By Tom Winnifrith | Monday 30 December 2019

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

During the first seven days of Christmas each of the team will serve up two share tips (buys or sells). I will serve up 4. That makes 20 in total. Enjoy our share tips of the year 2020. Tenth up is a BUY from Steve Moore who does not own shares in the company below.

Before the first of my two selections for 2020, a brief look at 2019’s; the first was San Leon Energy (SLE) – where the shares initially swiftly rose from 26p, particularly sparked by a 20th February announcement of a tender for 10% of the issued share capital… at 46p per share. It was recommended here to tender shares but that we’d still be happy to hold the remainder. They have slipped back to a current circa 28p, but there looks to continue to be good reasons for a recovery from here.

My other selection was Synectics (SNX) – where as recently as October the shares looked to be heading back towards 200p. However, they were then hit by an update which included “UK market conditions remain difficult and, with apparent uncertainty among Synectics' private and particularly public sector customers, the pattern of order deferrals and customer-led delays in the progress of existing contracts continues”. The shares are now around 150p and I apologise that this recovery play has not worked out as hoped currently, but I’ll continue to monitor – with potentially improved conditions for it in the year ahead.

And so my first tip of the year for 2020 is Amino Technologies (AMO). Shares in this self-styled “technology provider for modern TV experiences” were above 200p as recently as October 2018, when they were then hit by a warning of “an intensification of external macroeconomic headwinds”, including “higher than expected component price increases”. However, consumers wanting to enjoy content at the time and location of their choice has remained a clear trend and there has since also been a “transformation programme”.

The company most recently updated on trading in early December – noting it “expects to report trading performance in line with market expectations. The group continues to deliver excellent operating cash flows, with a net cash position of $1.4m at 30 November 2019 (30 November 2018: $20.3m) reflecting the impact of the 24i acquisition and dividend payments” and “the integration of 24i, the online video specialist which the group acquired in July 2019, is complete and 24i continues to make good operational progress… with the integration of 24i into the group now complete, we look forward to accelerating our evolution to higher margin software and recurring revenues”.

The acquisition of 24i was for, in cash, an initial €16 million (currently approx. $18 million) and Amino’s half-year results showed Amino having paid $5.3 million in dividends, with a further 1.68p per share then announced (£1.3 million, currently approx. $1.7 million) to be paid before that year-end.

House broker finnCap is looking for full-year adjusted earnings per share of $0.128 (currently approx. 9.8p), rising towards $0.14 (currently approx. 10.7p) for the now current year, with a maintained dividend per share of 7.32p. The shares have already recovered recently from little above 100p to a current 134p offer price – but that still suggests a very modest price/earnings multiple for a stock with the above outlook in this sector, net cash and an attractive (current 5.5% yield) dividend. That combination makes this my first selection here for 2020; buy.

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