Swapping stamps for coal.

Wednesday, Jan 29 2014 by
4

Further to my recent post about Cashing in my stamps where I sold one of my stocks on a 20x P/E and a sub 2% yield, this is where I found a more attractive P/E, yield and dividend growth combination.

It is a sligihtly strange one Hargreaves Services (LON:HSP) which describes itself as follows:

Hargreaves Services plc is a holding company. The Company is engaged in the provision of haulage services, waste transportation, mineral import, mining and processing, together with coke manufacture and related activities.

It breaksdown as follows:

Division T/O £m  Op. Pr. £m Op. Margin %
Production 103.2 16.7 16.2
Energy & Commodities 585.0 31.9 5.5
Transport 82.7 4.0 4.8
Industrial Services 149.3 3 2.0

 This gives an overall operating margin of just over 5%, although in the past it has been over 7%. So probably dull enough to be on a low rating which indeed it is. According to Stockopedia it is on around 6x with a 3% yield on a 12m forward basis and has a value rank of 95 (100 = best) so it ticks the value box.

In their  most recent H1 pre close trading update in December they indicated that trading was in line with their expectations and they were well placed for a strong second half. So It looks as though the H1 results due on 11th February 2014 should be OK, but will be interesting to look for any updates on demand for coking coal from their steel customers and the outlook for H2.

In last years results they made an interesting shift in their dividend policy as follows:

In view of the strong underlying performance from Continuing Operations the Board has confidence in recommending an increase of 15.3% in the final dividend from 11.8p to 13.6p. This will bring the dividend for the full year to 20.5p compared with 17.8p in the previous year, an overall increase of 15.2% for the year. The proposed final dividend will be paid on 12 December 2013 to all shareholders on the register at the close of business on 8 November 2013.

 The Board believes that the Group's dividend cover remains conservative. The average dividend cover over the past three years has been set at between six and seven times.  The closure of Maltby together with…

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All the posts and articles on this site are the personal views of the author and should not be construed as investment advice or a recommendation to buy or sell any of the investments mentioned. Readers should remember that share based investments can go down as well as up and you should only invest with capital that you can afford to lose. You should also generally get professional advice before investing unless you are happy to do so without.


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Hargreaves Services plc is engaged in sourcing, producing, processing, handling and transporting carbon-based and other bulk materials throughout the United Kingdom and Europe. The Company's principal activities are the provision of haulage services, waste transportation, mineral import, mining and processing, together with specialist earthworks and related activities. Its segments include Coal Distribution, Industrial Services, Logistics and Specialist Earthworks. The Coal Distribution segment provides coal, coke, minerals, smokeless fuel and biomass products to a range of industrial, wholesale and public sector energy consumers. The Industrial Services segment provides contract management services to clients in materials handling and a range of other industrial sectors. The Logistics segment provides bulk logistics to customers across the United Kingdom. The Specialist Earthworks segment provides earth moving, civil engineering and infrastructure services across the United Kingdom. more »

LSE Price
265p
Change
 
Mkt Cap (£m)
85.0
P/E (fwd)
17.4
Yield (fwd)
3.3

The Stanley Gibbons Group plc is engaged in trading in collectibles; dealing in antiques and works of art, auctioneering; the development and operation of collectible Websites, philatelic publishing, mail order, retailing, and the manufacture of philatelic accessories. The Company's segments include Investments, Philatelic, Publishing and Coins & Medals. The Company's Flexible Trading Portfolio (FTP) allows users to invest in rare tangible assets. It allows users to discuss their options and objectives with one of its Investment Portfolio Managers. more »

LSE Price
2.15p
Change
 
Mkt Cap (£m)
9.2
P/E (fwd)
n/a
Yield (fwd)
n/a



  Is LON:HSP fundamentally strong or weak? Find out More »


2 Posts on this Thread show/hide all

jjis 12th Feb '14 1 of 2

Results yesterday which got a good airing on Paul Scott's Value Report. Within that note there was some discussion of property potential which I had not factored into the analysis above. So it will be interesting to learn more about this as time goes by. Paul said he was attending a lunch with them yesterday, hopefully he will be kind enough to write it up.

In case you missed it and if it is of any interest, I wrote up my thoughts on the results on Compound Income?

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Sully8786 13th Feb '14 2 of 2

I've topped up this morning back to about 3% of my portfolio. I've been a long term holder anyway and think that this looks like an interesting situation.

Best,

Sully.

Company: Dave Sullivan - Talking Stocks
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