Good morning! Regulars here will know that I've been bullish on Portmeirion (LON:PMP) for a while now, having first flagged them up after their January trading statement in 2013, and then taking the plunge and buying some shares myself on 21 Mar 2013, explaining in that day's report how they looked good value on a PER of 11.1 and a dividend yield of 4.1%, with net cash of £7.5m. Although I bemoaned the 25p quoted spread between the 525p Bid price, and 550p Offer spread.

The shares have since risen about 31% to 700p Bid, 720p Offer, which is only really in line with the general market re-rating of smaller caps, as you can see from the chart below, where (as usual) the beige line is the FTSE Small Caps Index (excl. Inv. Trusts). In fact Portmeirion has lagged since Sept 2013, and would have risen to 800p per share if it had kept up with the Index.

Perhaps investors were concerned that their H1 results were not great, with EU anti-dumping tariffs on Chinese made products causing a temporary drop (of 38%) in H1 profitability for Portmeirion. As I reported at the time, they said that this would be corrected for the full year, and I'm pleased to report that they have been good to their word.

So we have a positive trading update today, indicating that profit before tax for the year ended 31 Dec 2013 will be in line with expectations, which is for 50.8p EPS. So at 720p Offer price, these shares are priced at a PER of 14.2 times 2013 earnings. Given the much more favourable economic outlook in its main markets (the UK, USA, and S.Korea), I think this is a reasonable price.

There is plenty of green (i.e. good) on the Stockopedia growth & value graphics, on the right here. The PER here is calculated on rolling forward earnings forecast, so that drops out at a lower PER of 13.1, and an attractive & growing dividend yield of 3.73% Note also the decent Quality measures, all solid green bars, indicating top ranking within its sector. This is a smashing business in my opinion, and one I'm very happy to hold pretty much forever.

Bear in mind…

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