Good morning!

Today I am looking at:

Tandem (LON:TND)

  • Share price: 177.25p (+4.3%)
  • No. of shares: 5 million
  • Market cap: £9 million

Final Results

(Please note that at the time of publication, I have a long position in TND.)

I swore that I'd never touch this share again, and have been an outspoken critic of management at this company - they are paid far too much relative to the size of the business and relative to shareholder rewards, and they spent a lot of money on acquisitions which simply didn't work out very well.

See my comments in September, describing the entrenched board of directors. See my pained description of the company's positives and negatives in July.

In a presentation at the Manchestor Investor Show last year, I laid out in detail the unpleasant metrics: director pay being 33% of operating profit and four times larger than the dividend.

Despite all of the above, I couldn't resist buying a few shares in it today.

It's a trade designed to minimise pain: I wouldn't be able to stomach losing a lot of money twice on this share, but I think it would be even more painful to watch it rally to a decent earnings multiple. So now I'm back with a small stake.

So why am I back in?

Well, it looks as if the company just had an extraordinary H2. There have been false dawns before, of course. So I'm not going to assume that things are going to be rosy from now on. 

About the company

Tandem is a designer, developer, distributor and retailer of sports, leisure and mobility products. It has a freehold property at its heaquarters in Castle Bromwich (Birmingham) and rents other premises.

It was already back on my radar as my friend Professor Glen Arnold has been blogging about it in recent days at the Deep Value Newsletter on ADVDN. He reckons there is value in it at the current level, and I agree, but with some heavy qualifications!

It used to be focused on bikes but is…

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