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Sanderson - Prospective PE of 2.4

February 2009

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:
  • SND
  • Price:
  • 17p
During the month we had an enjoyable lunch with Adrian Frost, finance director of Sanderson (SND; 17p). There hasn't been director buying in the last few months - the last time was in September when two directors bought a modest amount at 26.5p - but we think the shares are still worth looking at because at the latest price Sanderson looks like one of the cheapest stocks in its sector on a PE of 2.4. This anomaly arises mainly because institutional shareholders are wary of taking large positions in companies that trade infrequently. Sanderson has a market cap. of only £8m so this has left the shares at the mercy of small scale selling.The shares floated in 2004 when Sanderson's mainstay was the supply of enterprise applications 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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