Secondary Recommendation

Ibstock - Strong debut for UK's largest brick maker

January 2016

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

With consumer confidence, jobs, earnings and property prices all “flashing green for go,” there seems little that can de-rail growth in new housing starts, but two flies in the ointment have appeared in the shape of a scarcity of skilled labour and a shortage of bricks. Industry figures show that the financial crisis caused a fall in UK domestic brick production from 2.6bn units in ’07 to 1.6bn in ’12 and while this has partially recovered to 2.0bn, some 0.6bn has been removed for good. With lead times of 5-7 years required for new capacity to come on stream (due to difficulties in getting planning permission as well as finance), barriers to entry are quite high and customers have had to rely on Belgian and Dutch imports. But with the Ne ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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