MIDAS SHARE TIPS UPDATE: Storage giant has growth plans all locked up
Directors’ deals can be instructive. When senior management sell shares, that can ring alarm bells. When they buy, it suggests they have confidence in their company’s future.
Earlier this month, Charles Peal, a director at self-storage business Lok’nStore, bought almost 100,000 shares at £5.64 each, a purchase worth £550,000.
At the beginning of this year, he forked out another £260,000 on Lok’nStore stock, when the price was £4.66.
Lok’nStore founder: Andrew Jacobs seeks out sites in prominent positions and makes sure they are large and colourful so would-be users know where to find them
Peal seems to be a smart operator. Lok’nStore shares closed at £6.45 last week so he has already benefited handsomely from his purchases.
The share price advance is timely but also well deserved. Full year results to July 31 – released just before Peal’s latest purchase – showed a 10 per cent increase in revenues to £17 million, with profits up 11 per cent to £5 million and the dividend 9 per cent ahead at 12p.
Brokers forecast further growth this year and beyond, with sales, profits and dividends all tipped to deliver robust gains. Lok’nStore has 34 stores but it has a pipeline of 14 more, well located in busy towns and cities across the UK.
These are likely to prove popular. Households use self-storage when moving home, downsizing or even to keep stuff they cannot bear to throw away. Businesses use self-storage too, particularly smaller firms looking for somewhere convenient to store stock.
Lok’nStore founder Andrew Jacobs seeks out sites in prominent positions and makes sure they are large and colourful so would-be users know where to find them.
Occupancy rates are rising and the company increasingly builds its own properties so they are ideally suited to customers’ needs.
Midas verdict: Midas verdict: Midas recommended Lok’nStore in 2015, when the shares were £3.07. They have more than doubled since then but there should be more gains to come. Peal has been a director since 2007 and clearly believes the stock has potential. Jacobs founded the business in 1995 and still owns 18 per cent of the shares. Brokers believe they should rise to nearly £7. A strong hold.
Traded on: AIM Ticker: LOK Contact: loknstore.co.uk or 01252 521010
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