- A gradual rise in near-term earnings multiple is justified, and masks further growth potential
- New acquisition should magnify operational gearing effect
- Current share price provides opportunity to buy in below institutional fundraising price
IC TIP:
Buy
at
1,285p
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
Excellent performance track record
Perfectly placed fund specialism
Consolidating industry
Important new acquisition
Favourite of top funds
Bear points
Higher rating than peers
Potential limits to growth
In 2007, Warren Buffett was interviewed by Jack Bogle, the late founder of passive fund giant Vanguard. “A low-cost index fund is the most sensible equity investment for the great majority of investors,” the Sage of Omaha was quoted as saying. “By periodically investing in an index fund, the know-nothing investor can actually outperform most investment professionals.”