Recent interim results

Highlights for the six months ended 30 June 2006

* Turnover up 13.8% to 1,371,000 (2005: 1,205,000)

* Operating profit up 296% to 194,000 (2005: 49,000)

* Profit before tax of 286,000 (2005: loss 20,000)

* Earnings per share of 2.20p (2005: loss per share of 0.6p)

Sharecast comment
http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=795279

Even cheaper now. Share price 50p

http://www.stockcube.com

Cant be any downside with this one.

Buy Stockcube at 54.5p
Says Luke Heron of Watshot.com

AIM traded Stockcube has achieved success in markets in which so many other companys fail. Over many years, the group has established itself as one of the worlds leading providers of independent financial research. On the investment front, not only does this company offer an excellent product, its shares offer the scope for considerable upside too. Buoyed by considerable cash reserves, this profitable growth business offers excellent upside potential for the canny investor.

Stockcubes analytical services have been used by institutional and private clients for over forty years and cover all investment classes including stocks, bonds, mutual funds, currencies and commodities. Marrying a broad range of analytical and technical disciplines, Stockcubes indicators and techniques are recognised as industry standard and used by investors across the globe.

The information market is huge and this is a business with established and firm roots in place to capitalise on the massive potential. In short, Stockcube is a cracking growth play.

The company has continued to devote greater attention to individual client requirements in its institutional investor consultancy and analysis services, where it recently reported turnover growth of 18%. The business is now poised for greater penetration of the institutional sector with a dedicated sales and marketing effort. Elsewhere, a growing demand for the groups Fullermoney product, the global investment strategy service, has seen a 24% increase in subscriptions in just a year.
Stockcube is a business that continues to boast a very strong balance sheet indeed, with net assets of 4.5 million pounds, of which 4.2 million pounds comprises net cash. This is equivalent to 47p per share and 44p per share respectively. The business is very cash generative indeed, with a total of 340,000 pounds cash coming in during the first half alone. I am very confident indeed, that in light of the first half performance, Stockcube will generate pre-tax profits of 520,000 pounds for the year to 31st December 2006, equating to earnings of 3.8p per share on a full tax charge.

For next year, pre-tax profits of 650,000 pounds should be within comfortable reaching distance, equating to 4.7p in earnings per share. Thus at 54.5p, we have a company trading on 11.6 times 2007 earnings. Discount the cash and it falls to just 2.3 times 2007 earnings. There is more than enough room for the shares to rise by 50% on a six month view and still leave the stock looking cheap. Buy.

Bull case is high operational gearing means a high proportion of any revenue increase will come out as profit. So this could be the start of a good growth story - this is the first year when institutions pay for research separately. Bear case is they squander their cash pile although theyve been very prudent so far.

Incidentally Luke Heron's "tip" sounds as though it was written by a 5 year old. What a load of tosh.

Buy Stockcube at 65p

A recommendation from UKMicrocap.com
As regular readers of UK-Analyst, if you are wondering why you might never have heard of www.ukMicrocap.com , it is because the site is never promoted on UK-Analyst. Launched in April 2006, UKMicrocap was established to tip microcap stocks, usually capitalised at less than 7 million pounds, for an exclusive readership of 200 people. Memberships were handed out on a first come first serve basis and over the last 10 months, we have had some stunning successes. We cannot claim 100% success on the site but our readers have benefited greatly from investments such as LO-Q and Formjet which have raced ahead. The site costs 500 pounds to access and if you wish to join the waiting list should a vacancy arrive you can register for it on the site at www.UKMicrocap.com

This tip is one that is yet to fly. We think that it will.

The Investment Case : AIM traded Stockcube is one of the world's leading providers of independent financial research. It's analytical services are used by institutional and private clients and cover all investment classes including stocks, bonds, mutual funds, currencies and commodities. The company is profitable, is growing, has piles of cash and its share price is perfectly poised to rise in the coming months. Stockcube has cash of 44.1p per share and growing, which if one takes out of the equation, leaves the shares trading on a historic enterprise value to earnings multiple of 6.1. Growth is the watch word here and for the current year to 31st December, the same multiple should come at 6, falling to 4.3 next year. Excluding the possibility for earnings enhancing acquisitions and/or a return of cash to shareholders, there is sufficient scope for the shares to double, making conservative assumptions, over an 18-month time frame.

Company Description : Stockcube is one of the world's leading providers of independent financial research. The group's analytical services have been used by institutional and private clients for over forty years and cover all investment classes including stocks, bonds, mutual funds, currencies and commodities. Stockcube brings together a broad range of analytical and technical disciplines. Its indicators and techniques are recognised as industry standard and used by investors across the globe. Indeed, the company's divisions and subsidiaries publish over 60 pieces of individual research each week. The bottom line is that Stockcube is a world leader in its chosen fields. Its clients include some of the world's largest and most sophisticated Fund Managers and Investment Banks. It also enjoys close relationships with individual investors and advisors, ranging from private clients through to senior asset allocators. Stockcube's subscription-based research is highly regarded in Europe, USA and Asia and its analysts are frequent contributors to the world's financial media.

Recently, Stockcube has devoted greater attention to individual client requirements in its institutional investor consultancy and analysis services where turnover showed an encouraging 18% increase over 2005. It is now poised for greater penetration of the institutional sector with a dedicated sales and marketing effort and with the clarity of regulatory changes in respect of payment for its services. The growing demand for Fullermoney, the global investment strategy service, reported during 2005 has continued apace with a 24% increase in subscription over the same period last year. Revenues increased by 26% during the period, reflecting gradual increases in unit prices. Turnover in the wider market services under the Investors Intelligence brand moved up slightly by 3% over the period absorbing the re-positioning of its services mix from individual subscriptions which fell in number by 4% to 'bloc' arrangements with institutional customers on a business to business basis. Elsewhere, Ecube has continued to provide valuable technology services to both its in-house and third party customers. Meanwhile, Sportcal continues to trade profitably and contributed 8,000 to group profits in the first six months.

Key Data

Spread: 62p-68p
Market Capitalisation: 6.4 million
Net Cash Estimate: 4.24 million (44.1p)
Ticker: SKC
Website: www.stockcube.com
Contact: CEO Julian Burney 0207 352 4001

Financials : The company's latest published results are for the six months to 30th June 2006. Turnover was up 13.8% to 1,371,000 and group operating profit increased very significantly by 296% to 194,000 from 49,000 in 2005. Profit before tax amounted to 286,000 compared to a published loss of 20,000 in 2005 and, like-for-like, increased by 120% over 130,000 reported for 2005. Earnings per share of 2.2p compared to losses of 0.6p, and certainly bode well for the full year. As of the 30th June, the group boasted cash balances of 4,242,000 up from 3,900,000 at the beginning of the year. Assets per share amounted to 46.8p of which cash represented 44.1p per share.

The forecasts are those of UKMicrocap.com and have not been approved by the company.


Year to
Sales ( million)
Normalised Pre-Tax Profit (,000)
Normalised Earnings Per Share (p)
PE Ratio

2005A Dec
2.42
430
3.6
18.05

2006E Dec
2.7
500
3.64
17.8

2007E Dec
3.2
700
5.1
12.74

Management: The company is headed by Chief executive Julian Burney and finance director Shirley Yeoh, both of whom have solid experience in the industry in which Stockcube operates. They are well incentivised to continue growing the business and have been the chief architects behind Stockcube's recent success, orchestrating a successful period of product development.

Bull Points

* The company sells premium product services that are in demand.

* We expect the company to be very profitable in the current year and that earnings growth will accelerate over the next 2 years.

* The company has piles of cash which could potentially be used for acquisitions or returned to shareholders

* Since undertaking a share consolidation, the stock has been catapulted out of the penny share category. This change has resulted in a change in image which has seen a steady increase in the number of new investors to the stock


Bear Points

* Possibility that company will tread water, retain cash, move sideways

Valuation and 3 Year Target : The business is very cash generative indeed, with a total of 340,000 cash coming in during the first half of 2006 In light of the first half performance, Stockcube should comfortably generate pre-tax profits of 500,000 for the year to 31st December 2006, equating to earnings of 3.64p per share on a full tax charge. For this year, pre-tax profits of 700,000 should be within comfortable reach, equating to 5.1p in earnings per share. An earnings multiple of 15 would not be excessive for a business delivering this kind of earnings growth, inferring a target price of 76.5. Adding the cash, which was 44.1p per share as of the interim period (will be nearer 45.5p by the 2006 year end and up to 50p by end of 2007) , infers an initial target price of 126.5p.

Assessment: Stockcube is a well run business whichis delivering solid revenue and earnings growth. The company has a decent management team, who have continually proven their ability to successfully develop and update the product portfolio inline with market demands. Supported by a robust balance sheet, the company operates in an attractive sector. A re-rating will be achieved as Stockcube continues to deliver on its earnings growth objectives. The company has confirmed its bullish expectations for the current year. We recommend these shares as a buy .

Key Data

EPIC: SKC
Market: AIM
Spread: 62 - 68p

It would be nice to see a trading update before results. There was one last year in January

just bought some of these following your various comments in the past. I bought 1000 @ 46.8p but it shows as a sale on the trades timed at 13.49. no buys at all today but an excellent purchase for me.
pete in wales