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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Real Good Food - Dropping coverage

December 2005

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.

  • Epic Code:
  • RGD
  • Price:
  • 96p
We had expected shares in Real Good Food to bounce once Chairman Pieter Totte had done the rounds to institutional investors to explain his strategy for the acquisition of sugar merchant Napier Brown Foods. Unfortunately, the opposite has happened and the shares have slid to a new low of 96p. One of the reasons for Real Good Food’s under-performance is that its shareholders had originally hoped to see it grow its earnings quickly through a number of small but earnings enhancing deals. However, the Napier Brown deal was simply too big and even worse, was wholly financed through a massively dilutive share issue, increasing the share capital by 384% to 68.3m shares. In fact the enterprise value of the enlarged company, includin ...

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Related Articles

Real Good Food - Shares are due for a bounce (October 2005)
Real Good Food - Acquires Napier Brown Foods (September 2005)
Real Good Food (July 2005)
Real Good Food - Shares posied for rise after results (May 2005)

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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