Stock of the week: Clarkson
Clarkson is a provider of integrated shipping services, providing a significant role in the movement of commodities and finished goods around the world. Interested investors should acknowledge that this is a company which is a leading provider of specialist services and has been growing its market share, as a result of its full-service client offering. It operates through four divisions; broking, finance, support and research and has global exposure with offices in 20 countries in six continents.
The broking division accounts for the majority of revenue, but in these difficult times, investors can be reassured that the group can benefit from its three other divisions, as a result of clients continually having to restructure and take advantage of its specialist services.
In its recent trading update, the group reiterated that its full year-results were to be in line with expectations, despite its security systems suffering a breach at the back end of last year. Clarkson insisted that the hack would not affect its ability to do business and it appears investors believe the company with the share price rising, albeit slightly, as a result. The share price is close to hitting an all-time high which was achieved in October.
A strong balance sheet and being debt-free could position the company to have a competitive advantage in the future and has enabled consistent dividend growth. We therefore consider the shares to be a ‘buy’ for investors taking a long-term view on a return to demand for global shipping.
In the present climate, investors should be prepared to accept a medium to higher level of risk, but this is a highly regarded company and market-leader.