Oh my GSH
Posted on December 3, 2007 by Richard Beddard
Filed Under Companies |
Unlike Connaught it doesn’ t have nine years of earnings figures we can use as a benchmark. Even so the ratio of its price to the average of six years of profits is 32, against a median of about 20 for the UK stock market.
Although business has been brisk recently, relatively low earnings in earlier years brings down the average and makes the share look expensive at the current price of 490p.
Maybe GSH really is expensive, though. There’s no guarantee profits have found a permanent new level, or that they’ll go on rising. It could be a pucker growth share, or its profits could be vulnerable to a down-turn.
My money’s on the latter (not literally). Perhaps managements’ is too. David Simons, company secretary, sold 100,000 shares, nearly halving his stake in November. Colin Tennent, chief executive, sold 92,000 reducing his holding by over a third.
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