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Oh my GSH

Posted on December 3, 2007 by Richard Beddard
Filed Under Companies |

When I said there’s money in social housing, perhaps I should have extended that to any building. Just like Connaught, GSH (GSH), which maintains somewhat larger buildings (for companies like Tesco, British Airways, and ITV), is on a high.

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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