Gamble of the week: A very cheap newspaper distributor

Shares in this newspaper distributor have disappointed. Phil Oakley looks at what's gone wrong, and explains why the shares are a buy.

I must admit to being slightly puzzled as to why the shares in this company have been treated so harshly by the stockmarket. It's not as if they were outrageously expensive and pricing in lots of profit growth.

It's true that itstwo main businesses are pretty dull and unexciting. Delivering newspapers and magazines to newsagents (distribution) is not glamorous and is a declining business. Yet,ithas been good at controlling costs in this activity, while it generates lots of surplus cash to pay dividends.

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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.