More Results & a Pearl of Wisdom
I like company results time, because results give me a tangible feeling of whether I'm doing well or not. I suppose even that's a little self-indulgent, as I desperately try to stay away from the folly of market watching, but at least it gives me a good hint as to the underlying direction of the company. That's something that the price doesn't reflect - a core principle behind being a value investor - so results days give me a nice chance to catch up, reassess, and hopefully give a company some fresh eyes. Alongside my post on Wednesday, then, we had two sets of figures come out yesterday.
Firstly, Howden Joinery, a stock which I admire for more than just the cheap price - I'm hoping that isn't influencing my rational investing brain. Firstly, I like their annual reports - they have an easy to follow explanation of everything they do, from start to finish, thorough explanations of why they do what they do, and good supporting figures. In management statements, wording is concise and clear, and - something I wish more companies would do - when they note a figure is 'in line with market expectations' they state what those believe those market expectations to be. This is a breath of fresh air. In a sense, I'm not sure I am so concerned that it leads me to like the company more - because I think a management which values transparency and good communications is a management likely to be fair in other senses, too, and that's the sort of business investors should align themselves with. I should say I'm not being paid by Howden for this and, joking aside, I remain driven by the numbers and the relative valuation of the business. The interim statement looked to confirm my faith; it reported, as usual, revenues continuing to rise and the company continuing to steadily expand. Revenues were up 5.9% this time, with 20 new depots (they currently operate 510) planned for this year. They continue to occupy a significant chunk of my portfolio at a pre-exceptional P/E of less than 10, and happily so; things seem to be going along more or less in line with my original analysis, found here. (more…)