[SharePad] Screening For My Next Long-Term Winner: Somero Enterprises

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03 January 2019
By Maynard Paton

I am going back to basics with this SharePad trawl. I simply want to identify a quality company trading at a modest valuation that I can hold for the long term.

Given recent market conditions, I am hopeful SharePad will unearth a few likely contenders!

For this screen I demanded:

  • A forecast P/E of no more than 12;
  • An operating margin of 15% or more;
  • Net borrowing of zero or less (i.e. a net cash position);
  • A yield of 4% or more, and;
  • A market cap of £150m or more.

SharePad immediately found 20 shares that matched my criteria.

The name that stood out was Somero Enterprises. I was vaguely aware of this business having some prominence within its particular field — the glamorous world of concrete floors.

Simply click here to read my Somero Enterprises article for SharePad.

Maynard Paton

3 thoughts on “[SharePad] Screening For My Next Long-Term Winner: Somero Enterprises

  1. James

    I’m curious as to why you didn’t pull the trigger on this one? Your analysis all seemed very positive.

    Thanks though, great read!

    Reply
    1. Maynard Paton Post author

      Hello James

      Good question. I now really want to see significant management ownership with my investments, as I feel such businesses are often run for the longer term and provide less worry for shareholders when things do not go exactly to plan. WIth Somero, the business is good but a distinct cyclical element exists and the directors are happy to use company money to buy back their (not insignificant) options.

      Maynard

      Reply
  2. Doug

    I am a SOM holder and I think another generally unmentioned tailwind is lack of labour.

    Admittedly I have no special insight into the US but most of the developed world seems to be struggling to replace cheap foreign labour which is either drying up or being prevented by immigration concerns.

    Technology seems the obvious choice to replace cheap labour when this is no longer available.

    Reply

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