LONDON -- There was a splendid story on Bloomberg Businessweek last week about George Elliott, the founder of a hedge fund that plans to buy nothing but Greek stocks. Elliott managed to get himself an interview with the investment chief of a family office in London, but within seconds of sitting down, the executive told Elliott he had no interest in putting money into his fund. He merely wanted to hear Elliott's story.
Elliott, 39, responded by asking a few questions of his own, including whether the executive had invested in Russia after its 1998 currency crisis, in Argentina 10 years ago after the nation defaulted on its debt or in the Standard & Poor's 500 Index (SPX) in March 2009, when the benchmark plunged to its lowest point in 13 years. Finally, Elliott questioned whether the family office's investment chief had ever bought shares of Apple Inc. In all cases, the answer was no.
"Then you are not qualified to be discussing Greece with me because you have missed the best investment opportunities over the past 20 years," Elliott retorted.
Having seen this story, my editor suggested I might want to revisit my pet AIM-listed Greek company Globo
Go Globo
Globo is a mobile, telecom, and e-business software group which I first wrote about two summers ago when the shares were trading at 10.25 pence. More recently, in March this year, ahead of the latest eurozone-worries market sell-off, the shares were up to 24.4 pence and peaked at more than 32 pence in April.
Despite reporting strong trading so far in 2012 at its annual general meeting last month, Globo's shares are currently trading at just more than 20 pence. At that price, you're paying a mere eight times last year's earnings for what is, as you can see from the table below, a growth company.
|
Year |
Total Turnover (millions of pounds) |
Turnover From Outside Greece (millions of pounds) |
Pretax Profit (millions of pounds) |
Normalized EPS (pence) |
Earnings Growth |
|---|---|---|---|---|---|
| 2007 | 8 | 0 | 1.5 | 1.2 | -- |
| 2008 | 17 | 0 | 2.7 | 1.6 | 33% |
| 2009 | 21 | 0 | 2.8 | 1.7 | 6% |
| 2010 | 26 | 5 | 4 | 2 | 18% |
| 2011 | 38 | 18 | 10.1 | 2.5 | 25% |
Source: Morningstar; company reports.
Globo's international revenue is growing rapidly and is expected to rise to 60% of total group turnover in 2012 from last year's 47%, according to the recent AGM statement. In the same statement, management also reaffirmed its intention to divest its Greek commercial operations during 2012. It is planned that the divestment to a third-party will result in Globo retaining a minority holding in the Greek business.
In summary, then, Globo is a growth company with an increasingly international business, knocked down to a value price by a market having palpitations about anything remotely connected with Greece -- one for Mr. Elliott's fund, methinks, or for contrarian Foolish small-cap investors to run the rule over.
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