LONDON -- After a tough 2012, thanks to the Olympic security fiasco, 2013 hasn't turned out much better for G4S (GFS +0.00%).
A profits warning last month led to the departure of the group's impressively coiffured chief executive, Nick Buckles. Yet at least the firm appears to have a friend in the form of the world's richest man.
Bill Gates, through Cascade Investment and the Bill & Melinda Gates Foundation Trust, bought an additional 6.5 million shares in the company last week, taking his total holding to just more than 45 million shares.
Under stock exchange rules, holdings of 3% or more have to be publicly disclosed and this latest purchase took Gates' total holding to 3.2%.
Gates was famously an investor in JJB Sports, which, unfortunately, had to appoint administrators last October, and he invests mostly in U.S. companies. However, he has notifiable stakes in at least three other U.K.-listed companies:
|
Company |
Stake |
Last Notification |
|---|---|---|
|
BBA Aviation |
6% |
Dec. 2012 |
|
Bunzl |
4% |
Dec. 2011 |
|
Carpetright |
7% |
Dec. 2012 |
Of course, it's pretty unlikely that Bill Gates himself is pressing the buy button on these investments. Indeed, Cascade has been managed by Michael Larson since its inception in 1994.
Performance figures aren't disclosed, but a near 20-year tenure suggests Larson is probably doing a more-than-decent job. Bloomberg reckons that Gates' non-Microsoft holdings could now total some $30 billion.
So this investment in G4S, currently valued at around 100 million pounds, could be seen as just a side bet for Gates. Investors certainly seem less than impressed with the news, with the shares down some 3% today at 235 pence, although they were flat yesterday when the shareholding was initially disclosed.
G4S will need to work hard to turn its business around, after revealing a fall in profit margins last month.
Its new boss, Ashley Almanza, appeared upbeat at last week's rowdy AGM and says he has a number of plans to improve profit margins in 2014 and 2015. But he added that cost savings may take several months to identify. He is also keen on continuing G4S' expansion into emerging markets.
Finally, following in the footsteps of famous names and investors can be a good way of coming up with a shortlist of shares for further investigation.
And in this special free report, we delve into the favorite holdings of Britain's most popular professional investor. Just click here to download your copy of this exclusive wealth report.
