Each week, a professional investor tells MoneyWeek where she’d put her money now. This week: Marina Bond, co-manager of the Rathbone Recovery Fund.
Despite the recent bail-out of Ireland, and concerns over other eurozone members, stockmarkets – after a wobble – appear to be marching on regardless. Euro issues have been temporarily set aside, to be revisited in the New Year no doubt. Meanwhile, we’ve got improving manufacturing data out of Britain, America and China to ponder, a more positive employment picture, and the corporate sector – with some obvious exceptions among the banks – also appears in good shape. Share prices are riding this wave of optimism, but there’s still plenty of value out there – you’ve just got to dig for it.
Despite the recent bail-out of Ireland, and concerns over other eurozone members, stockmarkets – after a wobble – appear to be marching on regardless. Euro issues have been temporarily set aside, to be revisited in the New Year no doubt. Meanwhile, we’ve got improving manufacturing data out of Britain, America and China to ponder, a more positive employment picture, and the corporate sector – with some obvious exceptions among the banks – also appears in good shape. Share prices are riding this wave of optimism, but there’s still plenty of value out there – you’ve just got to dig for it.
Despite the recent bail-out of Ireland, and concerns over other eurozone members, stockmarkets – after a wobble – appear to be marching on regardless. Euro issues have been temporarily set aside, to be revisited in the New Year no doubt. Meanwhile, we’ve got improving manufacturing data out of Britain, America and China to ponder, a more positive employment picture, and the corporate sector – with some obvious exceptions among the banks – also appears in good shape. Share prices are riding this wave of optimism, but there’s still plenty of value out there – you’ve just got to dig for it.
Despite the recent bail-out of Ireland, and concerns over other eurozone members, stockmarkets – after a wobble – appear to be marching on regardless. Euro issues have been temporarily set aside, to be revisited in the New Year no doubt. Meanwhile, we’ve got improving manufacturing data out of Britain, America and China to ponder, a more positive employment picture, and the corporate sector – with some obvious exceptions among the banks – also appears in good shape. Share prices are riding this wave of optimism, but there’s still plenty of value out there – you’ve just got to dig for it.
Having remained profitable during the recession, Clarkson (LSE: CKN), the market-leading ship-broker, is well positioned to benefit from an economic recovery. Andi Case, chief executive (CEO) since 2008, has been building up ancillary services to exploit Clarkson’s leading position. Its balance sheet is strong and the potential over-hang from claims made against the group has been removed with their recent rejection by the High Court. In the short term, recent weakness in shipping rates and a shift towards more spot business may hit the second half. However, the stock’s rating remains attractive and the trend towards globalisation should continue to drive growth in volumes.
Engineering consultant Hyder Consulting (LSE: HYC) is also well placed for improving economic conditions. Management has been restructuring parts of the business and improving cash generation. The key driver is Asia-Pacific, the group’s most significant division: profits at the half-year mark were ahead of forecasts. There is also potential for further margin improvements within Britain and Europe, and Germany continues to recover. The UK water business should prove resilient with the next capital investment wave expected to gather pace next year. The rating is still attractive on 11 times forward earnings.
Melrose (LSE: MRO) is benefiting from both the improved economic outlook and a strong management team. Essentially, it buys industrial companies that need improving and realises the value over three to five years. While the group has similarities with private equity, returns have been generated from operational improvements, rather than leverage. Its three core units have come through the recession fighting and overall trading remains strong. It’s likely Melrose will dispose of one of its businesses at some stage, and do the same trick again with another acquisition. This is a management team to back.
Optos (LSE: OPTS), a relatively new holding, and perhaps less well researched by the market, supplies machines that take digital images of the eye. Unlike rival machines, Optos’s technology captures more than 80% of the eye’s interior surface. As well as helping to identify eye conditions, there’s growing evidence to suggest it may indicate the presence of diseases such as diabetes and certain cancers. CEO Roy Davis, who used to run the highly successful medical devices firm Gyrus, has been restructuring the business, reducing debt, re-positioning the sales team, and introducing more appropriate pricing structures. With the launch of an upgraded device next year, and a new low-cost version in the pipeline, Optos is placed for growth. Recent bolt-on acquisitions to expand the range of products it sells will also help drive earnings. The shares have had a good run of late, but the valuation remains attractive.