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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Primary Recommendation

Powerflute - Acquisitive paper mill operator on low PE

July 2007

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.

  • Epic Code:
  • POWR
  • Price:
  • 110p
Shares in recent AIM issue Powerflute have traded quietly so far but we expect them to put in a strong performance over the next couple of years. The company, which was formed to buy and turn around struggling paper mills that are surplus to their owners’ requirements, is the brainchild of Chairman Dermot Smurfit, who enjoys a tremendous following thanks to the astonishing returns achieved by his old paper and packaging business, Jefferson Smurfit. The great news for would-be investors of Powerflute is that it has already made a success out of its first deal, a paper mill in Finland, which means that analysts are forecasting earnings of around 9p this year and 10.5p next. This makes the shares look very good value even befor ...

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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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