Spaceandpeople (LON:SAL) markets, sells and administers promotional space in high footfall venues across the UK, including shopping centres, theme parks, retail parks and airports. It offers a comprehensive service covering everything from consultancy to the provision and management of retail merchandising units in shopping centres.
A five year agreement with Land Securities started in April 2012 and provides SpaceandPeople with an additional weekly footfall of 2.4 million shoppers in 12 venues including many of the leading UK shopping centres including The Bridges (Sunderland), White Rose (Leeds), Gunwharf Quays (Portsmouth) and Overgate (Dundee).
All good company stuff but what about the numbers?
Over the years I have developed a methodology focusing on five fundamental factors; price, earnings, growth, net debt and cash-flow, which help me follow Warren Buffet’s two rules of investing:
Rule 1: Don’t lose money.
Rule 2: Don’t forget rule number 1!
If you lose 50% of your money, you need to make 100% to get it back. That’s a lot of hard work. I know. Of my first three stocks two went bust and one was taken over for a fraction of what I paid for it. I bought them because of the hype about the future and because they were going to make me rich. They were valuable in terms of learning but that’s all.
My method is intentionally boring and has a layer of in-built safety (a margin of safety if you like) so I don’t have to worry about short-term fluctuations in value. When investing based on fundamentals you don’t have to worry about Mr Market’s irrational mood swings, although price volatility can help you time your entry and pick a good stock more cheaply.
One of the key things I have learnt is that your investment style needs to fit your personality. For me it’s important that I have real conviction when buying a stock so I don’t panic during market corrections, unless the facts change of course.
Back to SpaceandPeople
SAL has a PE ratio of 10.9 (forward P/E of 8.1) and a dividend yield of 4.5% that is more than twice covered. Earnings are forecast to grow at 24% for the 12 months to December 2012. For a company that is forecast to grow its earnings by 24% year on year, a P/E of 10…