Think about it. A company has been able to increase its profits from less than #17 million (£13 million) in 1996 to almost #39 million in 1997 and #48 million in 1998 and is forecast to grow profits further to almost #60 million in the current year.
The company has been hugely successful in growing by acquisitions, has a portfolio of highly-regarded products and effective management - yet still trades on a historic price/ earnings ratio of 11 and a prospective p/e of just nine. The company? Kingspan.
Small-cap companies might not be the flavour of the month, but one would ordinarily expect that a company like Kingspan - with its record - would be trading at the very least on a substantial premium to the small/medium cap average even if it cannot aspire to trade at the 20 times earnings of the market's blue chips.
It certainly does not do Kingspan's ratings in the market an awful lot of good when a director sells a chunk of shares when they are trading at such a low level. But then the director who sold 150,000 at #2.45 each this week, Dermot Mulvihill, has been a regular seller of Kingspan shares, having unloaded £310,000 (#393,000) last June when the Murtagh brothers - Gene and Brendan - sold £22 million worth and another £337,500 six months earlier.
While the placing of 5 per cent of Kingspan shares owned by directors last June was welcomed by a preeuro market short of the stock, the most recent selling by Mr Mulvihill at such a low price is hardly a vote of confidence in the shares.
The markets simply don't like to see directors selling at these sort of levels and, given the level interest rates, many fund managers would far prefer to see directors leveraging themselves to increase their shareholdings in companies they are very well paid to manage.
Since its flotation, Kingspan has produced no unpleasant surprises when it comes to trading, but the group has had the unhappy knack of garnering unfortunate headlines. These have included the arrangement where directors had their salaries topped up by dividends from a patent income company, the eh . . , unorthodox share dealings by members of Brendan Murtagh's family - not to mention Mr Murtagh's personal exposure to MMI.
Too many events have tended to overshadow what has been an excellent trading performance by Kingspan. The company is fundamentally sound and at #2.35 the shares seem extraordinary good value if the non-trading glitches can be eliminated.
