Seek refuge in Ferguson

Investors took fright at half-year results in March from Ferguson (FERG), the world’s largest trade distributor of plumbing and heating products. While it came as little surprise that conditions in the UK remained sluggish, the market was rattled by signs that a much anticipated slowdown in the US (83 per cent of first-half sales and 91 per cent of profits) could be dragging on the group's progress. Ferguson warned that group organic growth in the second half of the year to July 2019 would be between 3 and 5 per cent, against 6.5 per cent in its first half. Its shares fell by around 10 per cent on the news. However, we feel concerns could prove overdone.