Many modern chief executives seem to have developed a canny knack of getting out just before their business takes a turn for the worse.Terry Leahy at Tesco is an obvious example of this.
So, when the long-standing chief executive of Aggreko(LSE: AGK), Rupert Soames, announced that he was going last Friday, the company's shares fell by 5%.
Soames has done a fantastic job at Aggreko over 11 years. Under his leadership, the company has rented out increasing numbers of temporary power generators across the world, leading to booming profits and a soaring share price. Aggreko remains an excellent business and earns fantastic returns on itsbits of generating kit.
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The trouble is that profits are still going down as demand for them has cooled in the last couple of years. Longer term, the need for temporary power to keep the lights on across the world and for major events is still there.
The shares, despite falling by more than a third since I reviewed them in November 2012, still look expensive. They were trading on 20 times earnings then and still trade on nearly 19 times now. At 15 times earnings a price of around 1,250p they'd look a reasonable long-term buy.
Verdict: keep on your watchlist
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