Special Report: 15 Investment Gems

From from real estate in Germany to online gambling - a night of strategy, secrets and stock picks

I have a Special Report like no other for you today.

Last week, I attended a dinner organised by Swen Lorenz of Undervalued Shares fame (if you don’t already subscribe to his letter, you should). Sixteen mega achievers from the world of finance were there - highly successful private investors, hedge fund managers, strategists, brokers, and more.

Each had to bring to the table their best current investment idea.

What a raft of brilliant suggestions there was - and from all over the world. From big macro calls to unknown tinycaps which could multibag, from real estate in Germany to online gambling. For example:

• A barely known company which designs the tech for online gambling

• A pharmaceuticals microcap which could 5x

• An under-the-radar oil driller which has just landed some huge contracts

Swen has kindly given me permission to give you, dear readers of the Flying Frisby, the inside scoop.

So, without further ado, here are those ideas.

Where the Smart Money Sees Value

NB Each presented their ideas in a different way, so there is not a consistent template to the way each of them is presented.

I promised anonymity to everyone who wanted it, which was everyone - except Charlie!

We start with a couple close to home.

1. Foxtons Group plc (ISIN GB00BCKFY513, FOXT.L)

One leading newsletter writer gave us the nation’s favourite estate agent (!). The company has had something of a turnaround in the last three years due to a change in management. Against a backdrop of consolidation of the British estate agency sector - rival Chestertons has already been taken over by private equity - Foxtons is soon likely to become a bid target, he says. The inside scoop is that investors controlling Foxtons' fate want a sale of the company, and soon.

Rumour has it that the company recently had an approach by private equity at just under 90p per share. The stock is now at 67p. The major shareholders are unlikely to agree to a sale for anything below 100p.

With a market cap of £200m, this stock is liquid enough to easily get in and out. He expects the company to put itself up for sale soon, or for more fireworks from activist investors if the board isn’t proactive about utilising the current favourable environment for M&A in this sector to the benefit of its shareholders.

2. WHSmiths (SMWH.L)

Charlie Morris of Bytetree (sign up for his Atlas Pulse if you haven’t already) proposed another high street name: WHSmiths. This leading global retailer for news, books, and convenience for travellers has 1,700 stores in 30 countries: 1,100 in airports, hospitals, and railway stations; 520 on UK high streets, plus Inmotion Entertainment, which sells electronics - Bose headphones, etc.

As anyone who has paid £6 for a last-minute pen or £3 for a small bottle of water having just had theirs confiscated at airport security will testify, this is a high margin business.

The UK high street division is in decline, however, and WHSmiths is going to sell it. In doing so, debts (mostly accrued during the pandemic) will be paid off, and the company will be able to focus on the more lucrative international travel and monopoly locations, which will lead to a re-rating. Charlie feels its pandemic de-rating is behind it, and that this cheaply valued, but highly cash generative business could easily double.

What’s next?

Let’s go for something exotic.

This one came from an analyst at JP Morgan.