Bottom Line: Farnell underrated
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SHARES in the electronics distributor Farnell barely moved yesterday. The stock rose 1p to 580p but even taking account of the falling market overall this appears to be an ungenerous reaction.
Pre-tax profits, ahead of expectations, rose 39 per cent and the dividend rose 19 per cent.
Farnell's main business is distributing thousands of different electrical gadgets. It acts as a middleman between manufacturers who are happy to contract out marketing and users who are willing to give away margin to secure quick and reliable delivery.
Farnell has been helped by recovery in the UK. Looking ahead, it has Multicomponents, a distributor based on the Continent, which it bought in November.
Multicomponents has annual sales of pounds 150m but an operating margin of 3 per cent against Farnell's 10 per cent.
Analysts expect current year profits of pounds 60m, putting the shares on a prospective p/e of 20 times but Farnell deserves the premium.
Even with a gross yield of 1.6 per cent the shares have attractions.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments