MARC HASENFUSS: Sometimes it is worth the effort of digging so deep
Will it be worthwhile to take a closer look at poorly rated industrial counters where the share price might be poised for a low-risk bounce?
A friend of mine who has been in the investment game an awfully long time has confessed to being on the verge of abandoning his quest for uncovering value at small-cap stocks. His contention is that the broader market would these days rather not take on the sometimes arduous task of recovering value in "difficult businesses" by unpicking complicated control structures and pushing for executive shake-ups or organisational restructurings.And I must say there is something masochistic about trying to unlock value or implement a turnaround in a business that has its prospects locked into a trading environment that is subject to destabilising economic and political developments.I still love my small-cap shares, but am fretful at the dismal (even dismissive) market ratings tagged onto more than a handful of profitable industrial counters.Let’s peruse a few. Aluminium supplier Hulamin — which has hinted at a fairly rosy outlook — trades on a five times earnings multiple. Household goods sup...
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