Serco (SRP) is becoming a classic falling knife share, Questor said in The Sunday Telegraph. Its loss of the contract to run London’s Docklands Light Railway caps a grim 12 months for the outsourcing group. The problem for Rupert Soames, the new Chief Executive, is that Serco is in danger of being locked into loss-making contracts for years as costs increase. The closer management looks into the company, the more problems it finds. Yet the shares are still not cheap despite downgrades. Steer well clear.
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