Annualising the half year result puts Rectifier on a Priceto...

Annualising the half year result puts Rectifier on a Priceto Earnings ratio of about 21 at today’s closing price. Have to agree with othersthat this looks low for a profitable company operating in a new growth industrywith modest debt.

 

The company seems to run on the smell of an oily ragchoosing not to sell itself and comes across as a Private company.

 

It got me digging and maybe the turnaround from almostoblivion a few years ago plus the high ownership by Directors and employeeswith engineering backgrounds, combine to make this an usually shy and reclusivestock. With the high ownership by the Board and employees, the takeover premiumis probably lower.

 

The sharemarket announcements are written poorly, as if theoriginator has trouble with English. Any broker looking to contact the companyfor analysis may have to deal with a CEO located overseas (Malaysia) and reluctant to assist.For investors this could be both a blessing (shares can be acquired at a lowerprice) and a curse (they may continue to be overlooked by investors).   

 

The Chairman has played a good game to date, assumingcontrol, improving finances, refocusing operations and steering it from therocks. He now needs to alter the culture away from a reclusive company on thebrink, to one of a small company with international operations growing stronglyin an emerging new industry. The Board is full with knowledge in its coreindustry but now might be a good time to add someone with a corporate backgroundin finance, investment and rapid international growth.