UK Value Investor

Hi all

Please read this and take 2 minutes to update your feed.

I recently moved the http://www.ukvalueinvestor.com/ site and the RSS feeds got messed up.  My fault, sorry.

So if you're reading this message you should subscribe instead to the RSS feed at:

http://feeds.feedburner.com/UkValueInvestorsDiary

as this is where new posts are being sent to. 

The old RSS feed which you are reading is no longer active.  I'm guessing that you haven't seen a post from me since late September and this is the reason why.

So please subscribe to the feed above and unsubscribe from this old feed.

Thanks for your patience, and feel free to browse around the new site at:

http://www.ukvalueinvestor.com/

All the best and once again, my apologies

John

Warren Buffett has a name for companies that are virtually certain to grow consistently for decades into the future. He calls them The Inevitables. Now, I certainly don’t think I have the skills to spot these uber-rare companies, nor do I think I need to. But occasionally I bump into a company whose financial results do a fantastic impression of one.

One of my favourite value investing sites is The Value Perspective which is the web outlet for some of the (value) fund managers over at Schroders.  In their latest piece, Andrew Lyddon talks about how the telecoms sector is not exactly a hot favourite.  Despite the sectors deserved reputation as a defensive play, share prices often fallen and lagged far behind the wider market and even other defensive sectors.

The FTSE 100 closed last Friday at 5,129, about 13% down from when the carnage began in early August. At that level it has a PE10 of about 12 (PE10 is the 10 year average real price to earnings ratio) while the PE10 average is around 17.6. PE10 has been a pretty good indicator of future returns over the last century and it’s a favourite of mine for checking what sort of returns might be possible in the next few years.

The model portfolio is filling up nicely (12 out of 20 slots taken) and now it's time to buy another company. I've scoured the market for the best high quality, high value shares and top of the pile for now is Balfour Beatty, the diversified engineering, construction and infrastructure services company.