Draper Esprit plc, formerly known as Ingleby (1994) plc, is a private equity and venture capital firm specializing in any stage in the lifecycle of a business from seed and series A stage, growth capital to pre-IPO investments, late stage, cross-stage investments, buyouts, PIPES, and makes direct and secondary investments in portfolio companies. It also seeks to buy entire funds from other tech investors. The firm primarily invests in companies from pre-revenue stage upwards. It primarily invests in technology-oriented business. The firm typically invests in digital technology, consumer, commerce, enterprise and data, systems and semiconductors, financial technology, internet, mobile, media, telecom, consumer technology, enterprise technology, deeptech, digital health & wellness and healthcare sectors, software, hardware, medical technology, and life sciences sectors. It invests in companies based in Europe, Ireland, and United Kingdom.
The chart of GROW.L shows price action in candlestick format over the past year. The green line study above the price shows that VectorVest values the stock at 1387p while GROW.L closed at 960p on the 20th of October 2021. The share is much undervalued by the market according to the VectorVest valuation model.
In the bottom window below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past year forecast EPS has risen from approximately 100p to 150p.
On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as very good. The share does not pay a dividend but reports an Earnings Yield of over 16% which is well above the average of all the 2000 plus shares followed on the VectorVest UK database.
The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is rated as very good by VectorVest. GROW.L has a forecast Earnings Growth Rate (GRT) of 12% which VectorVest considers to be good.
Technically, GROW.L is trending strongly as measured by the proprietary VectorVest Comfort Index. The Comfort Index (CI) is an indicator which reflects a stocks ability to resist severe and or lengthy price declines. The Comfort Index is unique in investment research and a secret weapon. VectorVest rates the CI of GROW.L at 1.6 which is excellent on a scale measured between 0 and 2.
GROW.L has fallen with the overall market since the 8th of September 2021 and recently found support from a confluence between a long term trendline and a previous resistance level. The latter has now become support. These support lines are shown on the above chart. Fibonacci analysts will note that the confluence is also a 62% retracement (not shown) of the previous trading range. This treble confluence is a powerful measure of support.
In the chart window just below the price, the MACD indicator is displayed using the standard settings used by the inventor of the technique Gerald Appel. The MACD has just crossed its signal line from a deeply oversold position. More importantly the MACD is showing marked reverse divergence with the price of the share in a divergence pattern that has been running over many months. This divergence on the MACD is a strong indication that the upward trend will resume soon and resume with significant momentum. Some analysts refer to a MACD reverse divergence with price as a “slingshot” for this reason.
GROW.L is on a hold recommendation on VectorVest.
At present, the advice on VectorVest (shown below) as I write on the morning of the 21st of October is to exercise caution in buying stocks as the overall London market recovers from the most serious pullback since the Covid collapse. Market Timing signals are mixed with the short-term measures of the trend Up, but the medium-term measure known as the DEW still printing a Down signal. The longest-term measure of the trend of the overall market known as a Confirmed Call (used by position traders) is Down.
Aggressive traders should consider buying the share if GROW.L breaks above the high of the 19th of October 2021 which is at 1036p.
Medium term swing traders should wait for the DEW Market Timing signal to print a Buy and the share to move to a VectorVest Buy signal above the 1036p level.
Position traders should wait for the Confirmed Call Market Timing signal to print a Buy and the share to move to a VectorVest Buy signal above the 1036p level.