Gamble of the week: A solid company going cheap

Cut backs and sell offs could see this business services group return to profit, says Phil Oakley. Brave investors should buy in now.

Business services group Rentokil has had to cope with tough markets particularly in Europe over the last few years and has been fighting fires on a number of fronts. Its troublesome City Link parcel-delivery business has kept on losing money, which has weighed heavily on the whole company's profits. As far as many investors are concerned, Rentokil shares are too much trouble for too little return. Yet I think they look quite interesting.

Rentokil has persuaded someone to buy City Link for the princely sum of £1, thus relieving the company of a major source of trouble. There's talk that Rentokil's facilities management business could be sold too. If that went, Rentokil would be left with three very solid businesses.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.