The return of recovery investing

A strategy based on finding stocks poised for a turnaround may be making a comeback, says Max King

Close-up of woman trading stock online on mobile phone
(Image credit: Luis Alvarez)

The announcement of the elevation of IMI to the FTSE 100 index came as a complete surprise to me because I had forgotten all about it. Short for Imperial Metal Industries, it was a mid-cap “metal basher” in the 1990s, having been spun out of ICI in the 1930s. 

Now, it seems, IMI is a specialist engineering business that “looks for ways of solving industry problems that have an impact on everyday life” in areas such as industrial automation, fluid control and energy efficiency. Its shares have risen by over 40% since mid-2022, but, on a multiple of less than 15 times this year’s earnings, still look good value. 

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.