Three companies previously mentioned here - Ascribe plc, Interquest plc and Empresaria plc – have benefited from one or the other of these tendencies. Now comes another, Adventis plc, this morning featured ("Buy at 62p"!) by mass pulp finance publication “Shares Magazine”.
It so happens this firm is another followed carefully by the scribe displaying, as it did until very recently, a profile closely matching what he generally looks for in any potential equity and business investment. Moreover, it operates in a market requiring some expertise to enter, has significant third party backing (equity placements) and has previously demonstrated excellent mass media contacts (ie exposure to potential investors). For the interested, the Adventis website contains a temperate and well-constructed analyst report from Robert Sanders of Arbuthnot Securities.
The point, however, is that in this case “Shares Magazine” is tipping a strong business but a share already extended by investors who did the thinking themselves, and a while ago. If previous tip trends hold, come next Tuesday retail investors will have pushed the price up to a point at which it becomes difficult to see further value in the equity until the business itself catches up with the enthusiasm.
Exhibit 1: Adventis plc 3 month price & volume chart
On the other hand, in these liquid times anything seems possible.
NB: The scribe owns equity in Adventis plc, Ascribe plc and Empresaria plc