The grand finale

The last two stocks to be looked at again: Creston and Plastics Capital. They are the smallest positions in my portfolio, and also among the two smallest by market cap. Below I've linked the rest of the series, as well as what serves as an introductory post: Post 1Post 2 , Post 3 Post 4 

And without further ado..

Creston

I still don't know about Creston (LON:CRE) . I bought it quite quickly as I wanted to stick my cash into something (probably a failing of mine) and skipped the usual long deliberations I go through. Relative to both their historic earnings and their forecast earnings, they're undoubtedly cheap - a P/E of something like 6. There's been a lot of complicating factors in that picture, though, and I seem to have lost some of my conviction on the shares. Perhaps it's just because they've relatively flatlined. 

The bigger problem is the 'feed-through' of the profit figures to actual shareholder returns, though. Two things seem to be complicating that. The first is the number of acquisitions and disposals the group has made historically. The CEO makes no secret of being acquisitive and wanting to build a larger group; by no means a bad thing, but it is if the primary goal becomes 'having a big outfit' and not 'maximising shareholder returns'. The latter should always be the board's primary objective, after all. A quick look finds this example, for instance, though whether you view it as bad luck - buying just before the crash - or overzealous expansion is another story.

One of the more interesting stories over the last few months regarding Creston was related to bid speculation - French ad giant Havas bought a 6% stake in the company, sending the share price up and prompting much discussion about the likelihood of a full takeover bid. That hasn't materialised, though I'm curious about what other intention Havas might have had. Perhaps it's a long-term thing.

Either way, I'm not sure refreshing my opinion has really refreshed much. I'm still very much in two minds about it - I'm a bit cautious of marketing type companies anyway, which might be influencing me somewhat, but I think that caution is for good reason. Luckily they release results soonish,…

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