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magazineWe make nearly 20% on K3 Capital trade in a month
K3 Capital (K3C:AIM) 267p
Gains to date: 19.2%
Original entry point: Buy at 224p, 1 February
We like advisory firm K3 Capital (K3C:AIM) for the complete package it delivers for small cap M&A deals and it seems the market has caught on.
A trading update on 1 March says the company is trading ‘substantially ahead’ of management’s expectations for the year to 31 May 2018.
FinnCap analyst Jeremy Grime says: ‘The private equity space sees K3 as a good source of buying opportunities and this has driven 2018 year end revenue up 20% to £16.2m from our previous estimate of £13.5m’.
He’s upgraded forecast earnings before interest, tax, depreciation and amortisation (EBITDA) by 27% to £7m.
The good trading update helped to drive up the share price, meaning our Great Idea is now up by nearly 20% in a single month.
‘While the timing of transactions completing is unpredictable, K3’s direct marketing model has resulted in a more significant pipeline going forwards,’ adds Grime.
‘Their “bigger and better” strategy of moving up the value chain has resulted in 50% revenue growth in the current year, we estimate. The power of market leadership gives this business the ability to be a large quoted company.’
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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