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Devro - Fast growth returns

December 2004

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DVO
  • Price:
  • 119p
It may not appear an exciting company but Devro (119p), the supplier of sausage casings with a 50% share of the world market, looks poised for a second phase of growth. The first was in the mid-90s when the shares commanded a PE in the mid 20s and traded over £3 but a period of high growth was followed by a setback following a disastrous acquisition in 1998 of Teepak, a maker of cellulose used for cooking hot dogs and skinless sausages. That business was finally sold in 2001.Nowadays, Devro makes most of its profit supplying collagen. Collagen is a by-product of the leather industry and when blended with certain ingredients, forms a gel which can be extruded into casings used for sausages or the films used to package hams, s ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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