Primary Recommendation

XKO - One of a kind - recovery audit business

October 2005

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.

On a prospective PE of 8.4 for next year, we think XKO is a very cheap share. The reason for this undemanding rating is that XKO’s current business activity is relatively unknown to most stockmarket observers given that it has been dramatically reshaped this year with the sale of one division and the purchase of another which has taken it into the fast growth market of audit recovery for the utility sector. Simon Beart, chief executive and a former accountant at Coopers & Lybrand, made the difficult decision to exit the low growth areas of hardware reselling by selling that division earlier this year for £13.4m and has completed the acquisition of UBM, a business formed in 1998 to provide audit recovery to the uti ...

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Market Comment

Domino Printing - Repeat sales from consumables

XKO - Sells its ERP division for Â£15m (November 2006)

XKO (July 2006)

XKO - Comfortable with forecasts (March 2006)

XKO (January 2006)

XKO - Teather initiate coverage with 148p target (December 2005)

XKO - Results expected 15 November (November 2005)

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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