Stocks in Focus: Intertek

This week I am writing about Intertek following the announcement that Chief Executive, André Lacroix has purchased a further 100,000 shares, costing approximately £3.27m.  This effectively doubles his investment in the company.

Intertek is a global testing, inspection and certification company.  They are one of three major players in an otherwise fragmented market and have a breadth of skills and knowledge which provides opportunities in a number of different sectors.  The markets that Intertek operates in include testing children’s toys as well as electrical testing and certification and checking oil shipments.

The fall in the oil price at the end of 2014 sparked fears that Intertek’s profits would be hit by a number of contracts being cut due to their exposure to this sector.  However the company’s profits remained more robust than investors feared and consequently the share price has rallied.  With the share price up 23% over one year investors may start to worry that the shares look expensive.

The announcement that the Chief Executive is willing to increase his holding suggests that the board is confident that the current price still offers value, despite its recent strong performance.   Since taking the Chief Executive role a year ago Mr Lacroix has indicated that he will continue to make bolt-on acquisitions focussing on the higher margin and higher quality parts of the business.  Clearly he feels confident that this will continue to add value for shareholders.


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