Irish Stocks: Some Are Neglected, Many Offer Value Opportunities

As we dig out our kelly-green ties and sweaters to honor St Patrick, and an astonishing number of people rediscover their Irish-ness, we thought it would be a good time to take a quick look at some truly Irish small caps — all of which can be found on US markets.  You don’t have to drink green beer to buy them — and you may well be impressed with the values that can be found in this Celtic Tiger so often these days categorized as the first “i” in PIIGS.  Ireland has taken a tumble, but it is still a hardworking country with an aggressive government program to lure foreign businesses.  If you look around, you’ll find interesting companies, as we did.

Dublin Street Scene: Ready for a Pub Crawl?

A good place to start is with Leopardstown-based ICON plc (Nasdaq: ICLR; http://www.iconplc.com),  a widely respected CRO (contract research organization) that provides clinical and development services to medical device companies, pharmaceutical companies, biotechnology companies across the British Isles, Europe and the USA, working in FDA Phases I-IV.  Leopardstown has always been known for its famous racetrack, but the horses there have nothing on the fast pace of ICLR activity.  ICLR shares trade at about $21.61, vs a year-high of $26.22 on average daily volume of just under 200,000 shares, and a market cap of about $1.3 billion.

Please do your own diligence.  We do not recommend stocks, nor are we financial advisors.  We do not own the shares in this article, and have no intention of buying them any time soon.

Staying with the healthcare theme for the moment, you might want to have a look at Bray, Ireland-based Trinity Biotech (Nasdaq: TRIB;  http://www.trinitybiotech.com ).  Although this diagnostics company is probably best known for its work in kits to diagnose HIV and sexually transmitted infections, it also works with diagnostics for autoimmune diseases/conditions, diabetes, liver disease and a variety of other diseases.  With strategic partners and distributors in 75 countries, TRIB reported revenue for 2011 of about $78 million, down from about $90 million the year before — but profits were up, which says a bundle about the determination of management to right the ship.  TRIB shares are trading at about $10.18 vs a 52-week high of $11.00, on somewhat anemic average daily volume of about 45,000; that says it could be underpriced vs what it might be if the audience were larger.  Market cap is about $215 million.

St Patrick's Day Parade, NYC (St Patrick's Cathedral)

Dublin-based CPL Resources plc (LSE: CPS or Pink Sheets: CPGLF; http://www.cpl.ie ) is a personnel-oriented company that supplies various kinds of skilled and highly trained temporary personnel, recruitment services, payroll services and a large suite of ancillary human resources services to companies across Europe, with an emphasis on eastern Europe (Poland, Hungary, Bulgaria, Czech Republic, Slovakia, et al), Ireland and Spain.  Revenues for 2011 of this company with women in the CEO and CFO positions were €235 million, substantially higher than 2010, with a profit of €7.2 million, and a rising treasury of cash-on-hand.  EPS were €o.19.  In US trading, CPGLF is changing hands at about $3.26 on negligible trading (not unusual for an unsponsored ADR), but volume in London is very low as well, indicating that either interest is low or the market has a very low float (or both).  Market cap is just under $100 million, which seems low based on blossoming results.

Dublin-based Datalex plc (Irish symbol: DLE; Pink Sheets: DLEXY; http://www.datalex.com ) is in the travel merchandising business, with advisory customers across the globe in the form of major airlines such as United Airlines and Air China (plus many more), and marketers such as Expedia.  The company’s very sexy website is helpful and fun, and lets you know just how much goes on behind the reservations systems you may be looking at online.  Revenues for 2010 were in the range of $27 million, with a loss of around $2.1 million, and 2011 results are due to be announced on March 30, 2012.  DLEXY shares are currently noted online at about $0.82 and in Ireland at about €o.40, but all the volume is on the Irish trading, with about 56,000 shares per day — however, since the ADR is sponsored you can buy the Irish shares, convert them in the wink of an eye to ADRs and put them in your brokerage account, which will store them at DTC, reversing the process if you want to sell (at no cost, btw).  We find that many cool small companies have neglected ADRs, which can present super opportunities for value-sniffing investors.

Finally, have a look at Dublin-based Fyffes plc (LSE: FFY or Pink Sheets: FYFFF; http://www.fyffes.com ), a purveyor of tropical fruits and produce: pineapples, melons, bananas: “Feel Good Fruit” according to the Fyffes colorful website.  2011 revenues were about €850 million with EPS of €0.06 per share, and a dividend of about €o.o2 per share.  Shares of the 1888-founded company are trading for about $0.60 on the Pink Sheets or about £o.36 on the London Stock Exchange, with London volume dominating at about 57,000 shares and a market cap of about $195 million.

Like I said, you don’t need green beer to look at these companies — although it couldn’t hurt, as they say.  Happy Saint Patrick’s Day!

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