Will Daniel Stewart Securities PLC Be The Next Quindell PLC?

Those who’ve been following Rob Terry and his stock market ventures will probably be in one of two camps.

You’ll either think, after his Innovation Group failure, and after he was ousted from Quindell (LSE: QPP) at the peak of his optimistic claims (like when he was claiming to be buying shares but was actually selling, and the share price was plunging investors into serious losses), that he’s perhaps not in the same league as Warren Buffett as your guru of choice.

Or genius?

Or, judging by what’s been happening at Daniel Stewart (LSE: DAN) of late, you might think he’s a genius and that the golden touch has so far evaded him through no fault of his own. Daniel Stewart was Quindell’s nominated adviser on AIM up until early 2012, and in recent months Mr Terry has been building up a stake in the broker. After his ownership reached 9.9% earlier this year, he’ll now need FCA approval to take it above 10%, and that’s something he said he plans to do.

What is curious is Daniel Stewart’s recent equity issue and how well it did. After the news broke on 24 June that Quindell is under investigation by the FCA over public statements made during 2013 and 2014, Daniel Stewart shares crashed to a smidgen over 2p — even though it had no relationship with Quindell in the period under scrutiny.

Yet the very next day, the firm raised £1.2m in new cash at a price of 3.35p per share — and I’ve absolutely no idea how it pulled that off. Even as I write, the shares have still only recovered as far as 2.8p.

Best not ask just yet

Meanwhile, Mr Terry has said he will not seek FCA approval for the purchase of more Daniel Stewart stock until after the conclusion of its Quindell investigation (and I think that’s wise — I’m reminded of that old corner-shop sign that says “Please don’t ask for credit, as a smack in the mouth often offends“).

Should you join in and buy up Daniel Stewart shares now? Well, the company has recorded losses in the past two years and there are no forecasts out there — and its shares have been suspended twice already, once due to a capital shortfall, and once after it failed to file its accounts on time.

Which reminds me, Quindell has also failed to get its accounts out when it should and its shares have also been suspended — the firm’s need to rewrite everything in the wake of PwC’s investigation is proving a little time-consuming.

Riches for the picking?

There might be something worthwhile left in Quindell after its Professional Services Division was sold to Slater & Gordon, but the problem right now is we have no measures by which we can assess it.

So will this prove to be third time lucky for Rob Terry? Daniel Stewart and the rump Quindell could turn out to be crocks of gold. Or night soil. But right now, there’s simply no way to tell.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.