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Wincanton poised to turn north

Wincanton shares have fallen recently, but the business is doing well and the shares look cheap
April 7, 2014

Wincanton (WIN) has been busy since we made the distributor one of our Tips of the Year in January (132p, 2 Jan 2014). It's won extra work with WH Smith and US furniture retailer Williams-Sonoma, which has generated "solid levels of activity" at the core contract logistics division. Maintenance contracts with Argos and a petrol delivery deal with Phillips 66 are lucrative too.

IC TIP: Buy at 120p

Investec Securities is baffled by the recent dip in Wincanton’s share price, which it believes represents a further buying opportunity. Indeed, there have been no nasty surprises and the business is trading in line with expectations. The broker expects results on 5 June to confirm adjusted pre-tax profit of £23.2m for the year to March and adjusted EPS of 14.1p. The figures are expected to rise to £25.5m and 15.6p in 2015.