It is always striking to me that even experienced investors feel the burn when the market goes down a little bit more than it had recently. I know that pension values, spread bet positions, public tipster perception and much more rest on the fluctuations of the world's financial markets, but the real money is being a thoughtful weighing machine investor and not a finger-on-the-trigger voting machine one. Well that is my perception at least…
I was pleased to see PZ Cussons (PZC) in its first half statement had pushed its debt burden down a little to now c. x1.5 ebitda. Yes, this was aided by disposals and - yes - trading remains decidedly mixed thanks to a reluctant Nigerian economy and a generally patchy global consumer (UK, Australia), but I still like this one. Longer-term readers will know I have been an accumulator of this one for a little while now and - as I noted here back in the summer - 'you are paid to wait' via a 4% dividend yield, which was maintained despite the trading challenges that pulled a couple of adjusted profit measures down by 13%.
Full year profitability is expected to be a tad below last year and naturally is dependent on the world not falling off a cliff. Some will see this as a risk, others as the land of easy comps rolling into view. Certainly, it remains fascinating as to who is appointed as new CEO, with the current incumbent set to retire. Actually, with the various regional geographic plans of innovation, simplification and focus nicely laid out in the release, I would not rush and would probably promote from within. Mid-teens depressed earnings multiple? Wake me up to offload some when we return to 250p+, otherwise I will quietly keep on accumulating in the 180s and 190s.
One stock I am not accumulating is Crest Nicholson (CRST). Here all metrics were down except the dividend – which was held and now offers investors a 7% odd yield to supplement the barely double-digit earnings multiple the stock trades on. So surely more exciting than the above mentioned PZ Cussons? Well I think not, especially when half the profits are from continued government 'Help To Buy' subsidy initiatives on top of a warped housing market, sitting on top of stretched price:income ratios. Naturally, in the bonkers way stock markets are, this one is now kicking around a 52-week high. Well done if you bought it well. I would cash it in if I was you as the 'Boris Bounce' has been well and truly factored into this pocket of the market.
Filed under: PZ Cussons, Crest Nicholson, Open Orphan, Centamin, Haydale, Aston Martin Lagonda
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