Wolseley reported an 11% rise in Quarter 3 earnings last month and, with a high proportion of its operations in the US, it should benefit from weaker sterling following the UK’s vote for Brexit.

Wolseley is highly geared to the US housing sector, where around 50% of its revenues and three-quarters of its trading profit are generated. The commercial and residential markets in the US have held up well, if this trend can be maintained then a forward price to earnings ratio of around 14 does not look too demanding. Bulls of the stock are hoping that margins will keep improving, helped by cost-cutting and a larger market share.

We remain positive on the stock and suggest medium risk investors geared for growth drip feed into the shares. We would highlight the need to remain focussed on the US economy, as a result of its exposure to the region.