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A share bought because it has a low price relative to its average earnings over ten years is one that gives serious cause for concern to Mr Market.
What analysts, who are less emotional than Mr Market, have to do is examine the facts and judge if the worries are justified or the share is down because of general irrational rejection or neglect.
We first looked at whether financial distress is a concern: it is not.
We’ve also seen that the business prospects are reasonably OK; they do not fall into Benjamin Graham’s category of being “definitely bad”.
Now we need to consider whether the competence and integrity of the senior managers is an issue.
We also need to address whether the company is subject to high instability due to either the nature of the business or the excessive use of debt financing.
The Board of Directors
The two main executive directors have been with the company for a total of 60 years. They have plenty of experience of booms and busts in that time, and in forming lasting relationships with clients.
Mark Lawrence, 47, CEO, former TClarke apprentice. CEO since 2010.
Mike Crowder, 50, Group MD. With the company since 21 years old. Appointed MD 2010
Martin Walton, 50, FD. Spent eight years with the company. Appointed FD 2010.
Danny Robson, 45, MD of DGR division (mechanical sub-contracting) since 2010. In that year he sold the company he founded to TClarke for £5.6m. Staff retention is around 98% in his division.
Beverley Stewart, 54, NED. Experience in construction……….
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