JO Hambro buying more NCC14 Mar 2017 09:04
This reads well:
Http://www.whatinvestment.co.uk/standard-life-us-stock-spectacular-growth-2553410/
"13 Mar 2017
Mark Costar , the high-performing manager of the JO Hambro UK Growth fund, has revealed the reasons why he keeps buying shares in NCC Group, despite the shares falling starkly over the past year.
Costar has long been an investor in the shares and he confirmed in his latest update to shareholders that he has been buying more as the shares have tumbled.
He commented, ‘NCC is the world’s largest independent cybersecurity consultancy and operates in an area of clear, strong and, if anything, accelerating growth. Ironically, as the company has prepared for this growth, it has invested significantly in resources ahead of delivering expected projects. In doing so, it has built up the key asset required to execute this, namely highly skilled cybersecurity professionals. Consequently, some unfortunate specific delays have left the business with a utilisation shortfall, which has become increasingly clear that it will not be able to fill in the immediate future. As a result, the company announced profits will be below expectations.’
Costar continued, ‘Unsurprisingly, investors did not take too kindly to this news. At one point, the company’s enterprise value was justified almost entirely by its unrelated software escrow business, thereby valuing the cybersecurity opportunity at next to nothing. While the events were clearly disappointing in the short term, when the dust has settled, this is very much a transitory issue in a powerful long-term story. Cybersecurity has become a critical service, it has moved from an IT decision to a boardroom decision. It has broadened out from the computer and the network to mobile, automotive, industrial equipment and indeed any device which can connect to the Internet. NCC has been investing to serve all of these areas and is highly respected in the industry, with very strong, client loyalty and engagement. In short, it is a highly valuable strategic asset. To us, this is a genuine case of growing pains in the business. As such, we took advantage of the weakness to add significantly to our position.’"
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