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MIDAS STOCK TIPS UPDATE: Have foresight, it will pay dividends – the group has made tangible progress since going public, but the shares haven’t kept pace
Smoking and obesity cost the NHS nearly £10bn a year and the burden is expected to rise further as more and more people eat too much fast food and exercise too little.
Bolton-based ABL was set up to tackle this problem in the North West by providing advice and support on weight loss, wellbeing and smoking. 2018, OUTLOOK FOR GROUP COMPANIES took over ABL and invested £3 million in the company, enabling it to grow and develop.
The company now works with more than 32,000 people, helping them get healthier and gradually freeing up capacity across the NHS.
Motivated: Foresight has invested in around 250 companies across the UK and supports businesses in cities such as Newcastle, Liverpool and Glasgow
Foresight is an unusual company. It has invested in around 250 companies across the UK and supports businesses in cities such as Newcastle, Liverpool and Glasgow.
But it is also a major financier of renewable energy infrastructure, financing more than 300 projects worldwide, including forest land in Wales, offshore wind in Italy and hydroelectric systems in Scotland.
Just last week, the group threw its weight behind a massive green hydrogen plant in Germany, designed to power thousands of homes and businesses.
Foresight is run by Bernard Fairman, a dynamic 72-year-old, who founded the company almost 40 years ago and floated on the stock market in February 2021 for £4.20. Midas recommended the shares for £4.25 two months later and today they are £4.70. But they deserve to move up the ranks, as the company is well managed, invested in high-growth companies and industries, and offers shareholders attractive and rising dividends.
Fairman divides his company into three subsidiaries: infrastructure, private equity, and Foresight Capital Management, which invests in publicly traded renewable energy companies.
Each of the three divisions manages a range of funds open to individual and institutional investors. When the company went public, there were £7.2bn in assets under management and Fairman was targeting £10bn by 2023. A trading update this month showed that the company is growing significantly faster. With assets under management approaching £12.5bn, Fairman is determined to keep pace by expanding its infrastructure business into the Americas and investing in more small businesses here and in Europe. Australia is also a point of attention, after Foresight acquired the Australian specialist Infrastructure Capital last summer.
Forecasting may seem complicated, but in essence the group invests in companies with strong long-term growth prospects. Fairman has done everything he promised and more since going public two years ago, including a commitment to pay out 60 percent of his earnings in dividends. Brokers are forecasting a payout of 19.8 pence for the year to March, rising to 22.4 pence in 2024 and over 27 pence the following year.
Midas verdict: Foresight has made tangible progress since going public, but the stock has not kept pace. This should change over time. Like Bill Ackman, Bernard Fairman not only founded Foresight, he poured millions of pounds of his own money into the company and owns nearly 30 percent of the shares. That makes him very motivated to deliver. At £4.70, existing investors should hold on, while new investors could find value at current levels.
Traded on: Main market ticker: FSG Contact: foresightgroup.eu or 020 3667 8100