HALMA (HLMA) – Industrials
| Price: £37.00 +11.7% | P/E: 35.3x |
| Market Cap: £13.9bn | Yield: 0.8% |
We consider Halma to be one of the best-quality companies in the FTSE 100, a genuine global leader in its niche areas of technology and analytics.
The firm’s 1H results show organic revenue growth of 16.7%, with roughly half of that coming from the photonics business, and EBIT growth of 26.7% as it continually improves its margins (now 22.8% against 20.7% previously).
Management continues to make strategic investments to support future growth, both organic and inorganic (acquisitions), which is fully justified by the strong and rising return on invested capital (now 16.2% against 14.3% previously).
Our View
There are very few companies which can match Halma’s returns, so while 35 times earnings may look expensive it is around the mean on a cyclically-adjusted basis over the past 40-odd years.
Successful investing means letting your winners run, and if you have the opportunity keep topping along the way.
Disclaimer: The author (Ian Conway) owns Halma shares.
Read the press release here: https://www.halma.com/investors
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