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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Caretech - Very disappointin graph; cut losses

February 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Full year results, for which most of the operational detail was provided by its  pre-close statement (see our December update), showed pretax profit rising 20% to £18.4m on turnover up 8.5% to £90m. Eps rose 12.6% to 30.6p. The recent under-performance in the shares has in part been caused by what analysts at Investec now believe to be rather aggressive treatment of its internal development and acquisitions costs, as a charge of £7.3m was described in the accounts as “exceptional†whereas new rules mean it must now be written off against profits rather than capitalised. The corollary is that future cash flow to spend on more value enhancing acquisitions will be less than previously expected. Investec has reduced ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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