Home » VectorVest » Wincanton (WIN) – VectorVest sees a solid growth opportunity at current levels

Wincanton (WIN) – VectorVest sees a solid growth opportunity at current levels

VVUKlogoFounded in 1925, Chippenham-based Wincanton plc (WIN.L) is a provider of supply chain solutions. Through its subsidiaries, WIN provides contract logistics services principally in the UK, Ireland, and Mainland Europe. The company provides supply chain services, including warehousing, transport and distribution, international supply chain, intermodal, freight management, high tech logistics, construction, records management, and home delivery; and value enhancing services, such as 4PL, consulting, inventory management, product manipulation, procurement, fleet management, reverse logistics, recycling, and retail solutions. It offers road, rail, barge, sea, and air transport solutions, as well as provides enabling services, including change/project management, solution design, technology, project financing, property management, health and safety/compliance, and industrial relations management. WIN serves consumer products, retail, automotive, energy and petroleum, industrial, agri-food products, chemical, high tech, and food service customers.

On November 10th 2016, WIN published half-year results to September 30th 2016. Underlying EBITDA rose 15.4% to £32.3m, on revenues 1.7% lower at £561.8m. Underlying pre-tax profits rose 36.4% to £20.7m, and the group proposed an interim dividend of 3.0p per share following the reintroduction of a final dividend at the end of last year. CEO Adrian Colman said the group had delivered “strong financial results from disciplined operational performance’” adding that WIN had seen “no significant change to trading volumes since the date of the EU referendum.”

A nascent recovery in WIN had been picked up by the VectorVest stock selection system during Q2 2016. Various metrics, including Earnings Growth Rate (GRT), reflecting a company’s one to three year forecasted earnings growth rate in percent per year, flagged up the stock. Additionally the Growth to P/E Ratio (GPE) – comparing earnings growth rate to P/E ratio – featured WIN on account of an operative GPE ratio of 2.13, which highlights the stock as undervalued. Also significant, the VST-Vector, a master indicator that combines a number of key VectorVest metrics saw WIN score a VST rating of 1.25, which is very good on a scale of 0.00 to 2.00.


The chart of WIN.L is shown above with the VectorVest valuation plotted as the green line above the price. Earnings per share (EPS) is shown in the window below the price as a line study in blue. The share has traded a bullish pattern know to students of charting as a “cup and handle” pattern. The pattern was made famous by William James O’Neil in his book “How to make money in stocks” and was the basis of his personal fortune. The cup started from approximately September 2015 to June 2016. The handle is the ascending triangle that I have drawn on the chart above. The share broke upwards from the handle of the pattern at the end of November and technically and fundamentally looks poised more upside.

Investors should note that WIN.L has a low relative safety metric on the VectorVest program. This means that there have been surprises and missed targets in the past. Investors who have the proven ability to manage risk proactively with stop loss orders should only consider the stock.

Taking into account the combined fundamental developments, support from VectorVest key metrics and solid technical picture, WIN offers a solid growth opportunity at current levels. Added to this, the stock is valued by VectorVest at 356.62p per share, and is therefore undervalued at the current 233p.

David Paul

December 21st 2016

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European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.com

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