The market’s unforgiving mood is creating opportunities for value investors and corporate predators. Investors are slaughtering companies that disappoint in this interim profit season, such is the pressure to justify valuations.
Brambles Industries is an example. Its board indicated last August that it was confident Brambles’ 2019 projections would be achieved. That followed the retirement of CEO Tom Gorman and appointment of new CEO Graham Chipchase, effective this month.
Brambles’ FY16 result was in line with its upgraded guidance – a good effort in a volatile global economy. The company expected underlying FY17 profit growth of 9-11% and reaffirmed its FY19 target of a 20% return on capital (ROIC) invested.