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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

Valuation is looking full, which tips risk/reward balance to the negative

LEARNING TECHNOLOGIES (LTG:AIM) 136.2p

Gain to date: 81.6%

Original entry point: Buy at 75p, 25 April 2019


Doing number crunching analysis is something investors can control but getting the timing right on a stock purchase takes a bit of luck, and we admit to enjoying our share of good fortune with Learning Technologies (LTG:AIM).

We explained in our original article that some analysts saw the potential for the share price to possibly double on a 12 to 18-month view, so to have secured an 80% paper profit in less than nine months gives us pause for reflection.

The company is due to issue a trading update later this month, which may make this article appear premature. Yet the calendar 2020
price-to-earnings multiple has inflated to more than 28-times (based on Refinitiv’s 4.8p earnings per share forecast), pushing the risk/reward balance potentially out of kilter with the comfort zone of many readers.


SHARES SAYS: This is not a judgement on the company but on the valuation. More cautious investors should take the opportunity to bank handsome profits and reassess progress down the line.

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