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By Malcolm Stacey | Thursday 22 June 2017
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.
Hello Share Smudgers. Companies which manufacture plastic bits and pieces have done rather well in my bag in recent years. But one I have not so far touched, yet ought to do so soon, is Carclo (CAR).
I’m not generally a fan of companies which give a misleading impression of what they do in their names. And you would expect Carclo to concentrate on the motor industry, which it doesn't really (though it does supply lighting systems to some vehicles, including Aston Martins). Misnomers put people off investing in your company, rather like calling your firm a set of initials does.
But that aside, Carclo is doing well. Based in West Yorkshire, it has many customers in the USA, Eastern Europe and China.
A year’s results were announced a few weeks ago. They showed that profit before tax had more than doubled to £10.5m over the time before. Nice. Earnings per share rose from 3.3p last time to 11.5p. Compare that to some of the firms you’re currently invested in! The P/E ratio I have is a lowly 14.8.
Underlying operating profits have grown year on year since 2013 at least. Another bright green light. And the company claims to have a perky order book. It boasts that it is on course to deliver ‘strong improvements over the coming years’.
About 70% of sales are overseas, which means the poorly pound will improve the balance sheet. The firm’s lighting innovations are now a recognised world leader, too.
This is one of those companies which makes boring, but essential stuff. In this case, parts for medical and electronic equipment together with lighting systems. Carclo invents, designs and flogs all these things and is blessed with a market seemingly keen to buy them.
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