Secondary Recommendation

Elementis - Hefty broker upgrade makes shares very cheap

September 2011

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.

Violent market sell offs like the one we've just seen typically lead to good companies being indiscriminately sold off alongside bad and this explains why shares in specialty products group Elementis have made no upward progress in spite of a hefty broker upgrade following forecast busting interim results. The 22% upgrade in forecast eps to 13.5p for this year by broker JP Morgan Cazenove has reduced Elementis' forward PE to just 10.1 and compares favourably to its expected year-on-year growth rate of 47%. But it gets even better when one considers that its ability to throw off copious amount of cash means that it is now expected to end this year free of net debt and to even have nearly Â£100m net cash (around one sixth of its market val ...

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Elementis - Euro 23m fine is repealed (August 2011)

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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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