Since I re-recruited Mears, the support services group, nearly two years ago, the shares have failed to provide the no pain, no gain portfolio with much enrichment.
Not the fault of the management, I hasten to add. Profits have continued to move ahead, and even the most casual observer would get the impression that the group is doing all the right things.
Yet the shares have failed to respond. Since September they have occasionally topped 300p, but seem more content hovering around the 270p/280p range. With the shares, as I write, at 280p, the portfolio's profit is just a few coppers.
To some extent this lacklustre performance stems from my own timing. If I had delayed my purchase a few months I could have picked up the shares at a much lower price. At one time in 2008 it slipped below 200p. But back jobbing is an unrewarding exercise. Initially the shares joined the stock market rally but now seem stuck in a rut.
Last week the group confirmed what most suspected: that 2009 was a record-breaking year. And chairman Bob Holt pointed out that Mears' main operating areas, social housing and home care, "are defensive markets where spend is largely non-discretionary and afford us substantial immunity from bad debts".
The group had not, he added, experienced "any work delays", although, I suppose, the subsequent deep freeze may have had some impact. With the order book continuing to grow, the stockbroker Panmure Gordon has rolled out a three-year profit forecast. It expects £23.3m for the year just ended; £30.3m this year; and £36m next.
Social housing, featuring contracts with an array of public bodies, is Mears' main occupation. But domiciliary care is growing rapidly. It made its first move into the care business nearly three years ago, when it took over Careforce in a £22.2m share deal. Since then it has mopped up localised operations. Now it is taking over Supporta, a widely spread home care group.
The Supporta board has backed the Mears share exchange strike which values the company at around £27m. At one time it looked as though Mears could face a challenge from a US group, Allied Healthcare International. But the American threat evaporated. Any chance of a counter-offer disappeared when this week Mears declared that it had acquired acceptances representing more than 50 per cent of its target's capital.
The deal, when finally completed, will make a dramatic impact on Mears' care business. The combined operation will be capable of successfully bidding for bigger – and longer – local authority contracts. Some 75 per cent of Supporta's income is derived from home care, with the rest coming from such interests as document handling and land and property management. I would not be surprised if Mears eventually sells these odds and ends.
Mears believes home care fits snugly with social housing, and on occasions there are opportunities for joint programmes as more and more organisations develop and strengthen their outsourcing operations.
PG is one of a number of stockbrokers that believe the admittedly generously rated shares should be higher – around 330p. Last month Collins Stewart suggested a similar price. But its target appeared to be based on the group's domiciliary care operation. And that estimate preceded the Supporta bid.
Indeed Collins observed that Mears was "well-placed to take a leading position in the consolidation and evolution of the domiciliary market".
Mears shares were first recruited in the early days of the portfolio. They were floated in 1996 at 10p. I had hoped to pick them up at 18p but a sudden surge forced me to pay 23p.
Later when I was about to go on an extended holiday, I decided to cash in some high-flying portfolio stocks. With the stock market then looking decidedly uncertain, I worried that they could suffer during my absence. So I unloaded Mears at 71.5p and another strong performer, Inter Link Foods.
Mears survived the turbulence in some style. And the shares went on to hit 380p. Inter Link prospered for a time. I sold at 365p against a 196p buying price and watched the shares climb relentlessly to 775p. But then it all went pear shaped and the once-thriving food group crumbled, eventually going bust.