Seymour Pierce

In an inventive missive, Seymour Pierce examines the impact of new management on a business. ‘Can a new management team turn around a business?’ asks its research team. ‘If the experience of Air Music & Media and Morrisons is any guide, the answer is an unambiguous “Yes”, but it takes time.’

Air Music is one of ten businesses highlighted that are under new management and have the potential to reward shareholders in the next 12 to 15 months. It is an AIM-quoted concern that should be turned around by the summer and whose ‘current rating of three times does not reflect future sustainable profitability’.

Grape expectations
Californian wine producer and distributor Cosentino Signature Wines is profitable again and should become increasingly so ‘within 12 to 18 months’, having been wrested back under control by founder Larry Soldinger. It is deemed worth holding, as is scientific instruments minnow Millbrook, whose woes have subsided and whose order book is strong, although profits look ‘unlikely’ for a ‘considerable period of time.’
Seymour Pierce is bullish on two businesses at the larger end of the market, labelling FTSE 100 constituent Wm Morrison as an outperform, the supermarket giant having been ‘sharpened’ by new CEO Marc Bolland. Even after forecast upgrades, the broker believes that ‘there is still plenty to go for’.

Worth buying on a one to two year turnaround and forward price-to-earnings ratio of 12 is FTSE 250 tech player Misys, where ‘early signs indicate that management is succeeding in its efforts to breathe new life into the corpse’, although the process could be as slow as ‘watching a super-tanker attempt to turn’.