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By Malcolm Stacey | Tuesday 13 March 2018
Disclosure: I own shares in one or more of the stocks mentioned. 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 Packers. Very sadly, my Christmas present has died. I’ve always wanted to see Ken Dodd live. And my thoughtful son Jack bought me a ticket to his May appearance in Manchester - and Doddy’s death is a dire blow to anyone with a sense of humour. Which has nothing to do with my subject for today. As now’t currently strikes my fancy by way of a blistering tip, I’ll cheekily enlarge on a couple of thoughts on this glittering website by the brilliant David Scott. He begins a long article with a couple of the best ways to gauge share value.
May I add my own positive indicator, if a minor and much more modest one. Find out the customers of the company you’re interested in. Many firms don’t live up to City expectations because their clients won’t always pay up on time. Or sometimes not at all.
Big firms with fine reputations usually DO pay up. And that helps to keep their suppliers within the profit-range presupposed by financial analysts.
I give as an example a company I commended to you only last week. Zoo Digital (ZOO) does the sub-titles and dubbing for the major movie companies. It’s a fast-growing market as new TV channels spring up all over the world. Happily, in just a few days, the share has risen from 79p to 88.5p as I write. That’s about 12%. And in my humble view, that’s only the start of it.
Just look at this! Zoo’s declared client list includes Disney, 20th Century Fox, Warner Brothers, Apple, Fremantle, Amazon, NBC, Lionsgate, Sony, Netflix, Paramount, Universal and the BBC. Can you see any of that illustrious lot defaulting on payment?
So I believe a pretty reliable indicator, in a world where indicators are notoriously unstable, is to check the client list of any firm before you invest in. And if its clients remain anonymous in the trading statements, you might be entitled to wonder why.
Though I’d hate you to see a list of customers for the Punter’s Return.
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