The key to timing an entry point in any company is to identify a major change in trend that other investors have yet to cotton onto, but are likely to do so in the near future, thus maximising the return on your capital in the shortest period of time. This is what’s on offer with my latest value investing play as investors have yet to wake up the buoyant trading the company is enjoying, nor for that matter the record order book that underpins expectations of double digit-earnings growth in the coming years. And, with cash building strongly, income investors are likely to be attracted by potential for the well covered dividend to be hiked at an even faster rate than analysts predict.
It’s not often you get the opportunity to buy shares in a UK focused company on a PE ratio of six when the business is set to deliver full-year earnings per share (EPS) growth north of 20 per cent, and is predicted to post another double-digit increase in 2019. The cash-adjusted earnings multiple is even lower still when you take into account a rock solid cash-backed balance sheet. Cash is building up strongly, facilitating a growing dividend.
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