Rationalisation comes at a cost. Morgan Advanced Materials (MGAM) saw net earnings slide on charges associated with the closure of businesses in Brazil, Venezuela and China. But if you dig a little deeper, it’s difficult to fathom why the shares are now 29 per cent adrift of their 12-month high. Admittedly, management foresees weakness in the "key industrial economies" in which the group operates, but these macro uncertainties need to be set against a more commercially focused – and simplified - business model, as Morgan exits "sub-scale" enterprises, or those with "limited synergy with the remainder of the group".
IC TIP:
Buy
at
262p