(Sharecast News) - The Sunday Times's Sabah Meddings thinks Volex's shares a buy, pointing to the recovery in all of the company's end markets recover and non-organic growth opportunities to back up her case.
Writing in the newspaper's 'Inside the City' column, Meddings touted the transformation of the manufacturer of high-spec cables under the leadership of its executive chairman, Nat Rothschild.
The financier, who had taken a 26% stake in the firm, had overseen an increase in prices, the sale of low-margin businesses and a recovery in the company's operating margins from 2.8% to 9.7%.
Now, the cables made by Volex, which are used in everything from laptops to monitors and printers were in demand as workers shift to working from home.
Sales of white goods had also soared as homeowners renovated and as hospitals reopened the medical business should also rebound.
"The question now will be how long the spike in consumer spending lasts," Meddings conceded, but added that "either way, Volex is diversified enough to benefit."
"Volex's acquisition of European power cord-maker Deka is likely to be repeated with further bolt-on deals.
"HSBC has a target of 445p on the shares, while Stifel is predicting 410p. The shares closed at 357p on Friday, valuing the company at £565.4 million. This is one to watch. Buy."
The Financial Mail on Sunday's Midas column told readers to buy shares of Ocean Outdoor, arguing that digital advertising had come of age while highlighting its chief executive officer's years of experience in the industry.
Key to the investment case for the firm was that digital billboards allow advertisers to do more with the medium and consumers tended to look at them for longer.
Adverts could also be highly targeted around large events.
Ocean's top line took a big hit in 2020 as Britons were forced to stay at home, sending its sales down by 38% to £86m and pushing it into a £10.8m pre-tax loss.
But with demand recovering fast, turnover was seen hitting £107m in 2021 and rising to £125m in 2022.
So too, profits were seen recovering to £14.5m in 2022 with substantial gains expected thereafter.
Technological improvements and acquisitions should drive sales growth.
"Digital advertising is one of the fastest-growing areas of the advertising sector and Ocean Outdoor is a leader in the field. Bleakley has years of experience, he is ambitious for the business and prospects are bright.
"At $8.38, the shares are a buy."
14 Jun 2022 17:35
IN BRIEF: Ocean Outdoor takeover by Atairos Group takes full effect
Ocean Outdoor Ltd - London-based digital out-of-home advertising firm - Following the plan of merger and articles of merger being filed with the Registrar of Corporate Affairs in the British Virgin Islands, the company's USD580 million acquisition by New York-based investment firm Atairos Group Inc has been completed.
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