Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
The shares of GKN (340p last seen) were as high as 468p in May having fallen back an impressive 27 %. After the drop it is worth revisiting the logic for investing here. The reason for buying the shares hitherto was twofold: first the recovery in the world automotive industry (more than 46% of GKN Group sales are accounted for as supplying the world’s auto industry) and second the management’s strategy of building up the Group’s aerospace business by acquisition, taking the company into more growth prospect and better margins; considerably higher than in vehicle manufacture. However does this logic now bear up to scrutiny in light of recent performance?
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