CLOVER CORP (CLV)ROB Millner's Washington H. Soul Pattinson has...

CLOVER CORP (CLV)
ROB Millner's Washington H. Soul Pattinson has performed outstandingly in recent years, including the emergence of micro cap Clover Corp. Clover operates in the growing nutraceutical market, concentrating on the production and delivery of natural fish oils into food products such as baby formula and bread. In the developing world the overall market for infant formula is growing at 12 per cent a year.

Clover has grown its revenue and earnings at 20 per cent a year while preserving a cash-rich balance sheet and paying dividends. This approach is unlikely to change in the foreseeable future since Washington H. Soul Pattinson owns 28 per cent of the stock.

Advertisement: Story continues below The company earned $2.6 million net profit for the six months to January 31 and said it was confident the second half would be strong. Assuming the company doubles the first-half result, that puts it on a P/E ratio of 10 times for 2012 once the cash is backed out.

If the company can grow at 20 per cent over the next two years, this P/E looks skinny. All going well, shareholders could benefit from the double whammy of earnings growth and P/E expansion



Read more: http://www.theage.com.au/business/fish-oil-producer-could-put-investors-in-clover-20120509-1yd16.html#ixzz1uRMBv8EQ