Premium content from Motley Fool Hidden Winners UK
Our monthly Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of small-cap recommendations, to help Fools build out their stock portfolios.
“Best Buys Now” Pick #1:
Judges Scientific (LSE:JDG)
Why we like it: “Judges Scientific (LSE: JDG) owns a carefully acquired, select group of niche specialist scientific equipment manufacturers, growing from a £4m investment vehicle in 2003 to a business valued at over £660m by the market today. It has achieved this growth with a common-sense, savvy approach to acquisitions — buying world-leading companies that boast ‘an established product range, an international customer profile and sustainable sales, profits and cash generation’.
“Chief executive David Cicurel founded the company and has led it ever since, sticking to his method of acquiring companies like these very selectively. Cicurel remains the ‘key man’ at Judges. Even in retirement – which the 74-year-old CEO isn’t contemplating any time soon – he would like to work in an advisory capacity on acquisitions. Additionally, we’re satisfied with what we see as the strength of the wider management team, which includes Mark Lavelle, formerly of Halma, and COO of Judges since 2017.”
Why we like it now: Last month, Judges Scientific reported that its trading in the first four months fell short of expectations. Consequently, the share price has dropped almost 20%. However, Chairman Alex Hambro expressed optimism for the second half, anticipating a stronger performance that would enable the company to meet full-year market expectations. The current market consensus for Judges Scientific for the year ending 31 December indicates adjusted basic earnings per share of £3.8, implying a forward PE ratio of 26 times. Hambro further confirmed that the next Geotek contract is now in negotiation, with an expedition starting at the end of 2024. We suggest adding to your position during this period of weakness.
