Updates

Aldermore - 313p bid approach

November 2017

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.

An obvious leak had seen shares in Aldermore rocket by almost a quarter ahead of news that it is in bid talks with South Africa’s biggest lender, FirstRand, which has made an indicative offer of 313p. For the current year, Aldermore is forecast to report a pretax profit of £144.7m/eps 30.9p. The indicative offer may appear low on a PE basis but the subsector has been “over earning” due to virtually no impairment charges (it is close to zero in the mortgage books of Aldermore) and some brokers expect profits to turn down next year.We tipped the shares at 231p in May ‘15 and although this offer represents a new high for the shares, with Aldermore’s business dominated by BTL assets, it has been a fa ...

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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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