- More stocks are making new 52 week lows
- Everyman shares rise after Blue Coast ups stake
- Private equity group’s intentions unclear
Falling stock market indices tend to make the headlines and for good reason. Over the last month the blue-chip FTSE 100 is down around 4% and the smaller domestically focused FTSE 250 has lost 8.5% in line with the AIM market.
But it’s worth remembering the broad indices only tell part of the story. The indices are comprised of companies and a lot more of them are making new 12-month lows. For example, today there are 58 stocks making new 12-month lows in the FTSE All-Share.
One possible silver lining is that falling share prices can attract interest from predators and longer-term investors including private equity groups.
STAKE BUILDING IN EVERYMAN
One share bucking the trend today is premium cinema group Everyman Media (EMAN:AIM) whose shares are up 4% to 57p although trading volume is light.
The company has been notified that Private equity group Blue Coast Capital has purchased 2.5 million shares at 55p, which means it now owns 22.9% of the company’s issued share capital.
Russ Mould, investment director at AJ Bell commented: ‘Keep an eye on private equity group Blue Coast as it clearly sees value in the business, having lifted its stake in Everyman to 22.9%.
‘If the market won’t accurately value shares in a company, the trend is for someone to take that business private – and the stakebuilding in Everyman implies it could be one of the next candidates to disappear from the stock market.’
The private equity group, whose interests span property, hotels and leisure and consumer brands, has been steadily increasing its stake over the summer.
LONG-RUN BACKER
Since 28 July, Blue Coast Capital has hovered up 3.6 million shares at prices ranging from 110p to 53p per share.
Before getting too excited though it is worth pointing out that Blue Coast’s actions could merely be portfolio re-balancing to take advantage of the share price weakness.
When Everyman floated on the AIM market in 2013 the private equity group held 7.1 million shares representing a stake of 19.7%.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor of the article (Steven Frazer) own shares in AJ Bell.
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