Investment Column: Metal Bulletin looks solid

IT HAS been a grim market for smaller companies but few have bucked the trend more defiantly than Metal Bulletin. Shares in the publisher of newsletters and other corporate information have soared from 975p in February to 1,412.5p yesterday. Now trading on a forward multiple of 30, the stock is on a 61 per cent premium to the market.

This looks steep, but there are several reasons. One is the perceived possibility of a bid from Emap, which holds a 20 per cent stake. Other factors are the narrow share base and the company's apparent defensive qualities. Metal Bulletin publishes a range of "must have" newsletters for various industrial sectors.

In July it pulled off its largest acquisition to date, the pounds 8m purchase of Energy Information Centre, which produces newsletters and other material for the deregulated utility industries. The idea is to expand the products into France and other markets.

With a cash pile of pounds 8m Metal Bulletin is looking for other acquisitions. Profits rose 11 per cent to pounds 2.3m in the first half and the outlook appears robust.

Analysts are forecasting pounds 6.9m for the full year. Solid stuff but after such a good run there has to be an argument for taking profits.

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