Leeds Group Share Price (LDSG)

Spread is 30%. Nah...

http://www.stockopedia.com/content/best-of-the-benjamin-graham-bargain-screen-91293/

Hi mate,

Yes I see what you’re getting at. In light of that the share buy back plan does appear that it probably is a missed opportunity!

Happy to provide you other investments that I’m looking at / hold. Presuming you’re looking for companies with similar characteristics to this, SafeStyle (SFE) is a superb choice IMHO. It’s cheap, it’s growing, it pays a decent yield, and has a superbly lightweight & cash-generative business model. It combined value, quality, and income – basically everything you’d want in a company really but, of course, DYOR.

I have other investments of course – my largest holding is a huge value play, and the rest are a mix of value and growth, and then I have one blue-sky speculative stock in there too. But I’m not convinced you’d be interested in them so I’ll leave you with just my SFE tip (for now?)

As for other investments (which I don’t hold) EZY is tickling my fancy at the moment. It’s moderately cheap (worth about 1650-1700p I reckon), its yield is set to increase to about 3.1% also, and its benefitting from low oil prices at the moment. It’s the one company further up the food chain that I’m really liking the look of.

How about yourself? What other investments do you have / are looking at?

PS - apologies for taking so long to reply to you!

Hi Libero

As I understand it Leeds is a holding company and Hemmers is a 100% subsidiary of leeds. I completely agree Hemmers is a great company and the website i am referring to is that of leeds not Hemmers. (http://www.leedsgroup.plc.uk).

In the annual reports under dividends it says 'It remains the intention of the Board to seek further opportunities to maximise the long-term value of the Group to the benefit of all shareholders by identifying appropriate investments in businesses where they have relevant expertise and which may not necessarily be operating in the textile industry. In the light of such policy, the Directors do not propose a dividend'

I guess my argument is the share buyback is using company money that could be used for acquiring additional investments but instead is being used for a share buyback that will just raise the percentage ownership of the few individuals that hold the majority of the stock.

Although you may be right and I am getting the wrong end of the stick. I would be interested to hear what other investments you are looking at currently, we obviously look for the same sort of things.

Well I see share buybacks more favourably. To me that's a sign of confidence in the company and increases the value per share of course. Although I have to admit it's probably making an illiquid stock even more illiquid (can't help but notice the spread has widened once again)

re: Strategy, I think you've got the wrong end of the stick. It's a textile business basically, operating through Hemmers Europe and ChinohTex (in Shanghai)

The website looks great to me. Again not sure what you're referring to. http://www.textilhemmers.de/content.php?item=3&

Also it looks like they've properly considered their risks and made sure to transfer it (through insurance) or mitigate it (so they're not too dependent on one customer) etc.

"Principal risks and uncertainties.

Fire risk is mitigated by insurance, including consequential loss insurance to cover the loss of business opportunity while replacement stocks are obtained. There is an adequate disaster recovery programme in place with regard to essential computer systems. The commercial risks of operating in the highly competitive European fabric market are limited by the fact that Hemmers has a wide range of suppliers, and no customer accounts for more than 5% of revenues. The Directors therefore consider the principal operating risks of operating in this market to be the financial risks identified in note 3 to the financial statements."

I really like this company. I just wish it was more liquid.