What You Were Buying Last Week: Cape
Mar 1st 2013 9:54PM
Updated Mar 2nd 2013 12:00PM
LONDON -- One of Warren Buffett's famous investing sayings is "Be fearful when others are greedy and greedy only when others are fearful." In other words, sell when others are buying and buy when they're selling.
But we might expect Foolish investors to know that, and looking at what Fools have been buying recently might well provide us with some ideas for good investments.
So, in this series of articles, we're going to look at what customers of The Motley Fool ShareDealing Service have been buying in the past week or so and what might have made them decide to do so.
At number 10 in the latest "Top 10 Buys" list is Cape . (Based on aggregate data from The Motley Fool ShareDealing Service.) Cape is an international company that provides industrial services, mainly to plant operators in the oil and gas, power generation, chemical, minerals and mining sectors, and to major engineering and construction contractors.
Cape's performance over the last several years has been erratic, to say the least: A graph of its share price looks like a cross-section of the Himalayas. Small fortunes may have been lost on it -- between 2000 and 2002, the shares crashed by 90% -- but it also provided some excellent gains for lucky (and, perhaps, brave) investors. Between Nov. 2002 and July 2011 Cape rose 100-fold in value, from a nadir of 6 pence to a peak of 600 pence.
Cape's fallen a long way off that 600 pence, having issued no less than three profit warnings, and currently trades at 233 pence, so why might people think it's a good investment now?
Well, the company's got a new management team, led by a CEO (Joe Oatley) and chairman (Tim Eggar) who've both been putting significant skin in the game -- they've bought over 600,000 pounds of Cape shares between them since their appointments.
In last August's interim results, the company said it had a substantial forward order book of close to 1 billion pounds, which should help bolster its near-term revenues. And Cape is looking to profit from the burgeoning global liquid natural gas export market, by using its expertise in cryogenic installations.
It may not be a company for the faint of heart, and any recovery is unlikely to bring the 100-fold rewards of earlier years. But there are clearly some investors who believe that Cape is poised to deliver another market-beating return over the next few months, or perhaps even years.
A high-quality growth share
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The article What You Were Buying Last Week: Cape originally appeared on Fool.com.Jon Wallis has no position in any stocks mentioned. The Motley Fool owns shares of Cape. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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