I have taken the opportunity to top up on Zytronic, the opportunity having been created by an opinion given by Bearbull in the IC. I have some reference to the article but not a copy as such; I don’t subscribe to IC. I understand that the article said that the share was overvalued by 40% or something ridiculous well everybody has an opinion on stocks and after all, that is what makes the market function but it’s not a view I share.
My view of Zytronic is that it is an exciting growth company and to that end is priced very reasonable for a growth business. If you look at the PE(f) as given in Stockopedia this shows a value of 15.6. However, Zytronic has a decent amount of cash on the books and once you strip this out you come to a PE of around the mid 12’s; expensive, well no, I don’t see it that way.
How do the other numbers that attract me to this stock stack up?
We have a very healthy Piotroski at 9 which gives me confidence. Also, the Stock Ranks given in Stockopedia look very healthy SR of 96. Cross checking to see if that confidence is echoed by Sharelockholmes and I am pleased to say it is as they have a market score of 2 (1 is the best score with Sharelockholmes and 100 the worst). So all in all, I am comfortable with what I see.
Also just to keep me up to date I listened to an excellent interview of the CEO, Mark Cambridge, that Paul Scott did in the middle of December; all reassuring stuff.
Personally, I am in no rush with this one as I think it is a grand little company and am taking a view of at least a couple of years rather than a few months. To that extent if the share price does ease further then I may be tempted to top up again.
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