A day out of the office can work wonders for some analysts, especially if it is on a Company Visit.

Such a trip can help to cement impressions on just how well a company is trading and the way that its management performs.

So, it might not be too surprising to see that James Allen, from Liberum Capital, responded to the excursion, in rating the shares of this diversified company as a Buy.

Company visit proves beneficial

The journey to the group’s Head office in Middlesbrough also took in a visit to one of the company’s stores.

As a growing, diversified, financial services provider and retailer, Ramsdens Holdings (LON:RFX) operates in four core business segments – foreign currency exchange, pawnbroking loans, precious metals buying and the selling and retailing of second hand and new jewellery.  

Recent positive Trading Update

Early in October the company issued a Pre-Close Trading Update for the year to end September, which led to positive reactions with the shares rising to 219p at one stage, before easing back to 163p before the end of that month.

Analyst Opinion

Liberum are estimating that the sales last year rose from a lockdown £40.7m to £65.3m, with pre-tax profits rising significantly from £0.6m to £7.5m, lifting earnings up to 18.5p (1.2p) and boosting the dividend to 8.3p (1.2p) per share.

Allen considers that in the current year the group’s pawnbroking side will remain resilient, while the forex division may see a dip in its trading volumes but with better margins.

For the precious metal activities, he believes that the hike in the gold price will help, while the retail jewellery business should see growth and that is despite the recession.

Current year looking good too

The current year could see £72.5m of revenues generating at least £8.5m profits, 20.1p earnings and paying a 9.3p dividend per share.

With the group’s shares now trading at 201p they look ready for a New Year lift ahead of the finals being declared in the second half of January.

Liberum Capital has a 240p Target Price on the shares – that could offer a good seasonal gain.

The FTSE 100’s performance on Wednesday was a near perfect demonstration of a ‘buy the rumour, sell the fact’ trade as China said they would ease their strict COVID-19 restrictions.

China will now allow people to quarantine at home instead of state run facilities, and tests are no longer required to enter most day-to-day shops, work places and social venues. Healthcare and some government institutions will still require a test to gain access.

The FTSE 100 was broadly flat on the news with miners, oil companies and other China-exposed stocks falling on profit taking.

These companies have enjoyed a sharp rally during November as unrest in China raised hopes authorities would soon roll back on their stringent, and economically damaging, restrictions.

Confirmation China would begin easing proved to be a catalyst for investors to book some of the sharp gains enjoyed over the past month.

UK Housebuilders

UK housebuilders were weaker after more data showed UK house prices were falling.

“This is the biggest house price monthly fall since the last financial crisis and highlights the volatility in house prices in the aftermath of the mini-budget crisis,” said Joshua Raymond, Director at online investment platform XTB.com.

“It’s no surprise therefore to see such dramatic falls on a monthly basis and the fact the falls are felt fairly broadly across most UK regions highlights the fact the consequences of the mini-budget was felt across the entire sector. Removal of mortgage offers, sharply higher borrowing costs and rising inflation are all key factors behind this fall in house prices.”

Persimmon, Barratt Developments and Taylor Wimpey were all weaker on the day.

GSK

GSK helped offset weakness elsewhere in the FTSE 100 on Wednesday after the pharma giant revealed a positive outcome from a court case concerning the risk of cancer in specific trials.

“Shareholders in pharmaceutical giant GSK got some timely pain relief with news that it, plus its peers Pfizer and Sanofi, had successfully defeated thousands of lawsuits suggesting the heartburn drug Zantac caused cancer,” said AJ Bell investment director Russ Mould.

“This outcome is probably the best GSK could have hoped for given how comprehensively the judge in the case dismissed the plaintiffs’ arguments.

“While there is some risk of an appeal, and there are other cases outstanding, GSK will be sitting a lot more comfortably than it was before this judgement was handed down.”

GSK shares as much as 10% higher, before the rally faded as the session developed.

Games Workshop said trading was in line with expectations in a brief trading update on Wednesday.

The table-top gaming company said the epxtected core revenue of not less than £210 million, up from £191.5 million last year. The company also said profit before tax is estimated to be not less than £83 million.

The company has enjoyed an explosion in revenue since the beginning of the pandemic as they roll out digital gaming and offer licensing deals.

The robust performance will see Games Workshop hike their dividend to 165p per share – a total of £54 million – up from 100p last year. The company is also paying employees £1,500 each in December.

Games Workshop will release their half year report 10th January.

Games Workshop shares were 1.5% weaker at 7,287 at the time of writing.

This year has been punctuated by expectations of interest rate trajectories and today was a reminder we are not yet at the end of the hiking cycle.

Strong US jobs numbers last week have highlighted the required economic weakness for a Fed ‘pivot’ is still some months away, and rates will increase before they start to fall.

Nonetheless, the FTSE 100’s losses were slight and the index remained above 7,500.

“We’re very much in looking glass territory again with investors desperate for the Fed to ease up on rate hikes and therefore taking any bit of good news about the economy as bad news because it will delay the longed-for pivot,” said AJ Bell investment director Russ Mould.

“Better-than-expected figures from the US services sector, combined with some profit taking after a strong run, resulted in losses across the Atlantic overnight and the negativity permeated into Asian shares with some of the optimism about a loosening of Chinese restrictions also beginning to fade.

“The next key US releases come on Friday with producer prices data and a reading of consumer sentiment. Next Wednesday is decision day on US rates and the Fed’s actions could help set the tone for the tail end of 2022 and first weeks of 2023.”

Oil and gas shares

Although the FTSE 100 was trading negatively on Tuesday, roughly half of the constituents were trading higher. However, weakness in oil major Shell and BP dragged on the index as oil prices fell on concerns around Chinese demand.

Ashtead have been a major beneficiary of a push to improve infrastructure in their key North American markets.

Ashtead’s US and Canadian segments saw their revenue and EBITDA jump as increased activity in major infrastructure projects drove strong performance at Ashtead’s plant hire business.

The US market – Ashtead’s largest – saw EBITDA surge to $1,998.2m in the first half, up from $1,567.1m in the same period a year ago.

Canada’s EBITDA rose to $129.4m from $118.7m. The UK business was the only disappointment with revenue and EBITDA falling in both dollar and sterling terms.

Ashtead’s shares have posted astronomical gains since the lows of the pandemic and today’s Ashtead shares were little changed after a strong run into results. Ashtead was trading at 5,087p at the time of writing, up 0.5%.

“Ashtead’s been able to brush aside inflationary pressures and deliver a strong first half with top and bottom-line growth. Better still for investors, full year guidance got a bump higher too as Ashtead’s end markets look robust in the face of wider economic uncertainty,” said Matt Britzman, Equity Analyst at Hargreaves Lansdown.

Ashtead’s largest market, the US, is benefiting from a host of fiscal policies aimed at improving infrastructure and supply chain resilience – Ashtead’s scale and expertise should place it well to be a key supplier. Inflation on a host of cost lines remains a challenge, but Ashtead has the scope to pass most of the pain onto its customers with higher rental rates on its $15bn rental fleet.”