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Treatt (TET) 417p
Gain to date: 61%
Original entry point: Buy at 258.93p, 16 February 2017
Half year results from flavour and fragrance specialist Treatt (TET) were very impressive and included a 63% rise in pre-tax profit to £5.5m.
The company will now move into an investment phase, spending money in the US and the UK to provide capacity for future growth and improve technical capabilities.
The dividend was lifted by 7% to 1.45p. Treatt tends to split its dividend payments approximately one third for the first half period and two thirds at the year end. Investec forecasts the business will pay 5p for the financial year as a whole.
Treatt isn’t really a stock for income investors as the yield only equates to about 1.2%. This is really a stock for capital appreciation, namely a rise in the value of your shares.
The company has certainly delivered the goods. Its shares are up by 61% since we said to buy in February.
We’ll hold on to the stock for now, despite the temptation to lock in that handsome profit. Fundamentally this is a great business, so file it under the category of ‘run your winners’. (DC)
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