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Over the previous 5 years, the Rolls-Royce share worth has soared 1,228%. That form of efficiency is exceptional for a mature blue-chip firm. For comparability, the broader FTSE 100 is up by 59% throughout the identical interval.
However with a market capitalization of £91bn, Rolls-Royce is clearly well-known to many buyers — and intently watched.
There are different UK shares which can be a lot smaller however which have additionally been doing nicely – and that I believe might probably proceed to do nicely in future.
Robust information circulation
A type of is Journeo (LSE: JNEO).
I wrote just some days in the past that having already invested in Journeo, I hoped the share worth would possibly fall a bit so I might enhance my stake.
That implies that the Journeo share worth is now up 58% for the reason that begin of the yr – and 817% over the previous 5 years.
However that also means its market capitalization, at £78m, is sufficiently small to fly beneath many buyers’ radar.
Easy enterprise, with sizeable potential
The most recent acquisition provides cross-selling potential for Journeo, probably serving to it enhance its share of spend by present purchasers in addition to hopefully attracting new ones.
What I like about Journeo’s enterprise mannequin is that it’s easy however efficient.
With ongoing spending on public transport like trains, its potential finish market is ready for sustained development. However there are a restricted variety of gamers providing the kinds of options it does, corresponding to bus arrival time show boards. The extra contracts it wins, the extra credibility it positive factors to bid for brand spanking new contracts – and hopefully construct economies of scale.
Journeo has operations exterior the UK: for instance it has been supplying tools to New York Metropolis’s subway system. Hopefully that worldwide footprint will develop.
However, for now no less than, I see that as secondary to the funding case. The UK market alone for the transportation-related services and products Journeo is advertising and marketing is sizeable and set to develop. Merely persevering with to develop its market share right here might finally be an enormous win for Journeo.
Trying to the long run
That helps clarify why this UK share now trades on a price-to-earnings (P/E) ratio of 18.
That won’t look low cost. However with latest contract wins and the acquisition probably set to see earnings develop, the potential P/E ratio might fall. Final yr’s diluted earnings per share grew 36%.
The acquisition brings a threat that administration could give attention to integrating the enterprise and neglect the present one. Nevertheless, administration has been doing a sterling job recently and I’m optimistic that may proceed.
I believe this UK share, even after rising greater than 800% in 5 years, nonetheless appears like a doable cut price. I plan to hold onto my shareholding and see Journeo as a share for buyers to think about.
