For years the management have said the company is under-priced, but the Markets of late have been uninterested in long-term value stories. They saw a pension deficit and a boring company. Plus the markets have been moved by macro events for some years now. What a company was actually doing, or whether it was any good in its markets, has been of little interest. Value Investing had gone the way of the Dodo and those who practised it had gone to the wall unless they had very deep pockets.
For the smaller AIM market, this has proved a toxic mix. Poorer retail investors have pulled money out, day traders and high frequency trading rule supreme and the net effect has been a huge drop in volumes and a massive spread of P/E ratios. Companies that were highly valued on speculation then drop - even as they deliver on their business plans. Crazy city lore such as buy the rumour sell the news seems to have been applied without thought (this is the role of algorithms after all).
But one day, the tide will turn. Pure momentum trading has been suffering from the law of diminishing returns and then there are companies like Invensys that can suddenly show a huge return for the patient investor.
A move away from macro risk-on/risk-off would be a welcome boost to the markets and indeed will help companies to complete placings and raise finance again to get the markets moving again which in turn will feed through to the real economy fairly quickly.
