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Fulcrum Utility, Down 50% YonY, Up 37% On Insider Buying – The Turnaround?

Updated 19 Sep 2022

Key points:

  • Fulcrum Utility’s major shareholder has topped up his stake
  • FCRM shares are up 37% on that news
  • Perhaps this is the beginning of a turnaround?

Fulcrum Utility Services (LON: FCRM) shares are down 50% over the past 12 months but they’ve just jumped 37% this morning. That doesn’t claw back those past losses of course, that’s not how percentages work. But it is an encouraging sign at least, is this some turnaround in the company fortunes? The driver seems to be insider purchases of FCRM shares. The purchase is not huge, but it is large – and it’s a definite vote of confidence in Fulcrum’s prospects.

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The actual number itself is: “Price(s) 4.8p per share, Volume 9,447,173.” This also means that “Following this purchase, Bayford Group and its connected parties (controlled by Jonathan Turner) are beneficially interested in 116,212,821 Ordinary Shares, representing approximately 29.1 per cent. of the Company’s issued share capital.” A rough eyeball tells us that this tops up the holding by about 10% of the starting point and also to the maximum possible without needing to make a bid. Around and about on both those numbers.

It’s also another £400k and change being put into a company with a £20 million market capitalisation which is itself another vote of confidence. So, one conclusion we might take from this is that the major shareholder himself believes this is the bottom. That’s not proof positive that it is, of course, but it is useful information from someone better informed than we out here are.

Fulcrum Utility Services share price
Fulcrum Utility Services share price from IG

Also Read: A Traders’ Guide To Energy Trading And Investing

As to what Fulcrum actually does it’s, well, it’s in utility services. Essentially, providing the labour and expertise that makes the nuts and bolts of the energy infrastruucture work. Connecting up housing, say, or getting a new energy production site onto the grid, smart meters and so on. This is an area where we might rightly thinhk that business is going to get better. The current ructions in the energy market are clearly going to mean further changes in how energy is created and then fed into the wider network.

True, being in an expansionary market doesn’t mean that any specific provider is going to succeed, but its a pretty useful precondition for things to get better – that there is that market expansion. What is important to understand here is that Fulcrum Utility isn’t generating power itself – so it’s not reliant on those energy prices. The business at FCRM is instead the provision – and maintenance – of the infrastructure which allows that energy to be connected and moved around. That means that changes in the market mean potential business. We’ve considerable energy market changes going on, thus we can think that there’s considerable potential business out there.

The big issue here though is that we don’t know that market. But we might assume that a non-exec director and already major shareholder in Fulcrum would be better informed about that market position than we are. So, if he’s buying then perhaps that situation is on the turn and we should be following it?