The SIF Portfolio enjoyed a massive boost last week, when audio visual services company Avesco received a takeover offer at a 125% premium to the closing share price. Coming just two months after I added Avesco to the portfolio, it’s a remarkable bit of luck.
There was more good news on Tuesday this week, when packaging group Macfarlane issued an upbeat trading statement. The shares rose by 7%, after management advised investors they are confident of full-year expectations. With under two months left of the current year, this guidance leaves the stock on a forecast P/E of just 9.6. I believe Macfarlane remains attractive, despite its lacklustre performance so far.
A transporting opportunity?
Moving onto this week, I was surprised to see logistics group Wincanton appear in my screen results. At the time of writing, it’s the top-ranked eligible stock in my screen. So I’m obliged to consider it as a potential portfolio stock.
For those of you who aren’t familiar with this firm, Wincanton is one of the UK’s larger logistics groups. Mostly of its customers are high-volume consumer businesses, such as supermarkets. Wincanton ran into financial problems a few years ago, but management have delivered a commendable turnaround.
The group’s latest interim results were impressive, and Paul Scott’s recent chat with Wincanton CEO Adrian Colman was also reassuring. (You can find Paul’s comments on Wincanton’s interims and the transcript his Q&A with Mr Colman here.)
Isn’t it too late to buy?
Wincanton shares have risen by 225% over the last five years. You might think that’s enough to price in future gains, but it’s worth remembering that the company was priced for failure back then. Today’s share price of c.225p is still nearly 40% lower than in November 2006.
The shares currently boast a StockRank of 96, and qualify for five of Stockopedia’s Guru Screens. Among these is the Value Momentum Screen, which has delivered an annualised return of 19.4% since inception.
With a trailing P/E of 8.4 and a dividend yield of 3.9%, Wincanton doesn’t seem expensive. Let’s take a closer look.
Bargain value… but!
Wincanton’s has a ValueRank of 96, and scores highly in most areas:
The group’s earnings yield of 28% is deeply impressive. So much so that I thought it was worth double checking!
A look at…
