Cenkos Securities (CNKS:LN)

Cenkos Securities is a company I came across a while ago and have just added to my portfolio. I was attracted to its strong returns on capital of 20-40% and cash generative business (free cash flow has been roughly equal to net profit over the last 6 years). It also has a consistent record of returning all the cash it generates to shareholders (yes, all of it) via dividends and share buybacks. Since it listed in 2006, it has returned over £105m to shareholders (well over the current market cap of £64m). So is it going out of business, or struggling? No. It has net cash of £17m and another £20m in short term investments. The company has never made a loss and doesn’t look like it ever will due to the nature of the business. It is only at a P/E of around 10 (from a base of modest earnings) and with a forecast dividend yield of almost 10% this year.

Continue Reading →