Investors see an opportunity in industrial services company Cape PLC (LON:CIU).
One of Warren Buffett's famous investing sayings is "be fearful when others are greedy and greedy only when others are fearful" -- or, in other words, sell when others are buying and buy when they're selling.
But we might expect Foolish investors to know that, and looking at what Fools have been buying recently might well provide us with some ideas for good investments.
So, in this series of articles, we're going to look at what customers of The Motley Fool ShareDealing Service have been buying in the past week or so, and what might have made them decide to do so.
100-fold increase
At number ten in the latest "Top Ten Buys" list* is Cape (LSE: CIU). Cape is an international company that provides industrial services, mainly to plant operators in the oil and gas, power generation, chemical, minerals and mining sectors, and to major engineering & construction contractors.
Cape's performance over the last several years has been erratic, to say the least: a graph of its share price looks like a cross-section of the Himalayas. Small fortunes may have been lost on it -- between 2000 and 2002, the shares crashed by 90% -- but it has also provided some excellent gains for lucky (and, perhaps, brave) investors -- between November 2002 and July 2011 Cape rose 100-fold in value, from a nadir of 6p to a peak of 600p.
Cape's fallen a long way off that 600p, having issued no less than three profit warnings, and currently trades at 233p, so why might people think it's a good investment now?
Well, the company's got a new management team, led by a CEO (Joe Oatley) and chairman (Tim Eggar) who've both been putting significant skin in the game -- they've bought over £600,000 of Cape shares between them since their appointments.
In last August's interim results the company said it had a substantial forward order book of close to £1bn, which should help bolster its near-term revenues. And Cape is looking to profit from the burgeoning global liquid natural gas export market, by using its expertise in cryogenic installations.
It may not be a company for the faint-of-heart, and any recovery is unlikely to bring the 100-fold rewards of earlier years. But there are clearly some investors who believe that Cape is poised to deliver another market-beating return over the next few months, or perhaps even years.
A high-quality growth share
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> Jon doesn't own shares in Cape. The Motley Fool does own shares in Cape.
* based on aggregate data from The Motley Fool ShareDealing Service.
