Ennismore, the hedge fund which made a killing from the demise of Globo, appears to have its sights set on a new Aim target, Telit Communications.
The London-based fund founded by the former Barings banker Geoff Oldfield has taken a 1.12 per cent short position on the Israeli “internet-of-things” specialist – a £3m bet that the shares will fall. The move shook investors’ confidence and sent shares in Telit, which makes products such as GPS antennas, plummeting by 37.75p, or 17 per cent, to 180p. The company’s stock market value peaked at more than £400m in September but has slumped by 40 per cent in a month.
Telit’s nominated adviser and broker Canaccord, which also worked for Globo before its executives admitted to falsifiying data last month and subsequently went bust, downgraded it from “buy” to “hold” on Monday, with a lower target price of 240p.
Analyst Bob Liao cited weaker market conditions, pointing to a profits warning from Canadian rival Sierra Wireless, but also acknowledged investors’ caution on its “accounting policies and low cash conversion”.
The bulls grabbed UK stocks by the horns and hoisted the FTSE 100 up 122.38 points to 6,268.76 with hopes the fabled “Santa rally” – when stocks rise in the run-up to Christmas – is under way.
Engineer Smiths Group topped the Footsie, rising by 94.5p to 1,020p after it struck a deal to contribute less to its pension scheme, freeing up an extra £36m in free cashflow every year. Every little helps, given its exposure to the embattled oil industry, which makes up a third of sales. Meanwhile, Smiths’ detection business, which makes airport scanners, saw “good profitability growth”.
Defence stocks continued to rally and Rolls-Royce saw its share price rise by 27p to 555p.
Miners were again the bottom-feeders, with Anglo American dropping 23p to an all-time low of 431p as Investec analysts tipped the shares to fall to 402p, just as copper prices reached their lowest in six years.
Elsewhere, hacking victim TalkTalk shrugged off a “sell” downgrade from Société Générale and ended 2.5p higher at 244.5p.
