New Speculation: CMC Markets

[Hornblower]

This one has been on my watchlist for a few months. It's a FTSE 250 company providing online & mobile trading services (Spreadbetting, CFDs). 50%+ of revenue is outside the UK.

CMCX
£1.34 per share
P/E: 9.4
Yield: 5.2%
Mkt Cap: just under £400 million
Divi cover: 2
Very low debt
Decent return on capital and margins.

Profitable company that soared during lock-downs but has come back down to earth (both profits & share price). Share price has crashed 40% in the past year. There's also been a few recent bumps, for example financial director just defected to a rival and there was a large increase in operational costs last year. Hopefully that will translate into higher profits in the years ahead. They are also continuing to add products to their offering, with SIPPS being available soon.

I purchased 1 unit today for my portfolio. Nice starting dividend which I hope to go strongly over time. Small enough to grow for years, or be acquired. With the UK gov slashing private investors capital gains allowance, but favourable tax treatment of 'gambling' I think this company has good tailwinds. It also adds diversification to my (small) portfolio.

Hornblower

[Hornblower]

Update on my CMC speculation after 11 months:

The stock is up 108% on my purchase price. I bought at av. price of 122.6p, CMCX currently 255.5p.
I will continue to hold & hope to see strong dividend growth in the years ahead.

H

[Hornblower]

328p!

I've set my (first ever) stop loss at 270p.


H