Post-traumatic stress disorder is a dreadful condition that doesn’t only affect the military. Investors can also suffer, fearful of buying even long term winners after an extreme bout of stock market volatility. We saw this in the wake of the 9/11 terror attacks and the 2008/9 credit crunch. And unfortunately it seems to be happening again post BREXIT, with Bank of America Merrill Lynch reporting that institutional cash positions currently sit at 15 year highs. A sure-fire sign that sentiment is too bearish.
We mention this because one quality name that appears overly impacted by this ‘wall of worry’ is Gattaca (formerly Matchtech) - trading on a prospective PER of 8.5x and offering a thumping 6.9% dividend yield (1.7x covered).
The firm purchased Networkers International for £66.8m in a transformational deal back in April 2015, and today is one of the UK’s most profitable staffing agencies (see below), focused exclusively on the specialist engineering (60% Net Fee Income, NFI) and technology (40%) markets, that globally are worth $26bn and $57bn respectively.