All serious investors with equities in their portfolio should be checking their holdings with one topical thought in mind – since the private equity industry, stuffed with fire power as it is, has its eyes on UK companies, which of my holdings are its outriders likely to pursue?
This thought is much on Bearbull’s mind and Table 1 deals with it. In simplified terms, the table highlights some of the corporate characteristics most likely to attract private equity and quantifies the extent to which holdings in the Bearbull Income Portfolio possess them.
| TABLE 1: WHO TICKS PRIVATE EQUITY'S BOXES | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Debt | Profitability | 5-year growth rates (% pa) | |||||||
| Net debt/ebitda | Debt/Mkt Cap (%) | Short-term debt/total (%) | Profit margin (%) | Return on assets (%)* | Cash flow return (%)* | Revenue | Operating profit | Earnings per share | |
| GSK | 1.5 | 34 | 19 | 22.8 | 6.4 | 20.9 | 0 | -1 | 3 |
| Real Estate Credit Inv's | 1.4 | 26 | 100 | 87.1 | 8.6 | 6.8 | 10 | na | na |
| Record | -1.4 | 1 | 28 | 30.7 | 26.0 | 42.4 | 8 | na | 7 |
| Vesuvius | 0.9 | 42 | 26 | 10.6 | 8.1 | 14.3 | 2 | 0 | 0 |
| Williams Co's | 4.2 | 63 | 4 | 29.3 | 4.1 | 14.6 | 7 | 18 | na |
| Henry Boot | 1.1 | 21 | 99 | 11.7 | 6.1 | -2.4 | -8 | -3 | -5 |
| Anglo American | 0.5 | 37 | 10 | 30.0 | 7.0 | 24.7 | 10 | 25 | 28 |
| Carr's Group | 1.4 | 39 | 32 | 8.3 | 2.5 | -1.2 | -21 | -3 | -7 |
| Primary Health Prop's | 7.8 | 94 | 0 | 105.9 | 2.0 | 2.9 | 15 | 17 | 5 |
| Greencoat UK Wind | 1.1 | 31 | 14 | 170.4 | 21.1 | 11.6 | 57 | na | 40 |
| Johnson Matthey | 1.2 | 35 | 25 | 3.1 | 1.6 | 14.3 | 0 | 0 | -2 |
| Pets At Home | 1.3 | 26 | 16 | 11.0 | 7.2 | 17.1 | 10 | 12 | 10 |
| Victrex | -0.3 | 2 | 8 | 29.1 | 12.1 | 15.4 | 2 | -7 | -8 |
| Data for Debt & Profitability based on latest full year; * return on average assets; Source: FactSet | |||||||||