Tandem Group plc (TND.L) designs, develops, distributes, and retails sports, leisure, and mobility products in the United Kingdom and internationally. The company offers bicycles and accessories under the Boss, British Eagle, Claud Butler, Dawes, Elswick, Exile, Explorer, Falcon, Pulse, Squish, Townsend, and Zombie brands; football training products under the Kickmaster and Strike brands; golf products under the Ben Sayers and Pro Rider brands; and garden and camping products under the Airwave and Airwave Four Seasons brands. It also provides homewares and household appliances under the Jack Stonehouse and Snapframes brands; mobility products under the Pro Rider brand; outdoor play products under the Airwave, Hedstrom Play, and Hedstrom brands; and snooker, pool, and table sports products under the Pot Black brand. In addition, the company offers wheeled toys under the Bored, E-moto, Li-Fe, Stunted, Twista, uMoVe, Wired, Cutie Quins, and Zoomies brands. It also provides products under various license brands. The company was incorporated in 1958 and is headquartered in Birmingham.
At a recent Q and A session I was asked about companies that should prosper in the runup to Christmas 2021. I am hoping that this post will answer that query at least in part. Microcap TND.L should prosper in the leadup to Christmas along with index stock JD. L which was featured in this blog on the 7th of October 2021.
TND.L was found in a UniSearch which was written to pinpoint fast growing AIM stocks with fair safety of earnings. Please be warned that TND.L is a microcap stock with a large spread between the buy and sell price. The share seems cheap in relation to its peers, in the sector of the economy that TND.L operates within. This could in time lead to a rerating of the stock. With a fair breeze this share can develop into an excellent long-term hold for the brave.
The chart of TND.L shows price action in candlestick format over the past year. VectorVest values the stock at 856p while TND.L closed at 620p on the 4th of November 2021. The share is 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 two years forecast EPS has risen from approximately 38p to 77p.
On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as fair. The share pays a small dividend of 1.4% which is well covered by an earnings yield of many multiples of that figure. The dividend safety and dividend growth are rated as good on VectorVest.
The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is rated as excellent by VectorVest and this was the metric which alerted the author to the share. TND.L has a forecast Earnings Growth Rate (GRT) of 22% which VectorVest considers to be excellent.
TND.L has been in a consolidation phase over the last year. The share has found support at the 500p round number on five occasions. Technically orientated analysts should easily observe a very positive pattern first noted by Richard Wyckoff around 100 years ago. The pattern known as a “Wyckoff Spring” adds significantly to the probability of a strong breakout soon.
On the 11th of October the share price rose strongly from long term support on large volume which is an excellent sign that the share is being accumulated by wise hands. Similar volume accumulation was noted on the 15 and 19th of October. This can be seen clearly on a 3-month chart view.
TND.L has recently moved to a BUY recommendation on VectorVest.
In summary TND.L has excellent growth fundamentals which have a high probability of leading to a break upwards in the share price. The technical position based on price and volume patterns is very supportive of that view. The VectorVest stop loss is a close below 579p. The opportunity is suitable for the adventurous investor only as the relative safety (RS) of the earnings stream, at a rating of “fair”, is below the level required for a Worry-Free type of investment.