Shares to buy, hold and sell: Mark Martin


Marshalls is a provider of natural stones and brick from quarries that it owns. It's a decidedly unglamorous industry, admits Mark Martin, manager of the Neptune UK Mid Cap fund; but the nature of its business means Marshalls has been a key beneficiary of increasing house-building activity in the UK, and of the government's Help to Buy scheme.

Surprisingly, there is a shortage of tiles and bricks in the UK, says Martin. While that has not been an issue over the past decade when housebuilding has been low relative to historical levels, that looks to be to be changing, and
Marshalls should be well placed for the upturn in demand.

Martin likes the company's high-quality management and strong balance sheet, explaining that it has used the past 10-15 years "when construction hasn't been exciting" to "cut costs back to the bone", so that it is now a very efficiently run business.

"It is overlooked and under-researched, but change is afoot and Marshalls dominates its niche, with very few competitors," says Martin.

He originally started buying the shares in 2011 at around 80p per share, and has been topping up his holding "in the dips" since then. It is currently trading at around 175p.


De La Rue's business is in the printing of secure documents and notes, which means it prints currency for various central banks as well as passports for the UK. “There are all sorts of barriers to entry for this type of company,” explains Martin: such a business needs to be well trusted and respected, and to build a good relationship with its clients.

“De La Rue's relationship with the Bank of England is centuries old, so it is a unique company in that respect,” he adds.

A turnaround story with high-quality management, De La Rue seems to tick a lot of boxes; however, the reason it is a 'hold' rather than a 'buy' is because of a recent profit warning on the back of excess sup- ply of bank note paper, so Martin says it is something of a 'controversial' holding at present.

The company warned in October it expects profits of £90 million for the year, which would mean it misses its target of £100 million. Its shares fell around 10% on the news.

But Martin is still confident. An attempt 150 to buy the business by French company Oberthur back in 2010, at a cost 50p higher than the current share price, “has put a floor in the share price”, according to Martin. He thinks Oberthur could even come back for a second bite of the cherry.

Martin has held the shares since 2010; at the end of that year De La Rue had quality control issues with an undisclosed central bank, which saw its share price fall to around 640p. It is currently trading at 850p.


Martin first bought shares in Berendsen back in 2009 when it was trading at around 230p. Another “not very glamorous” business, Berendsen is a facilities management company that deals with washrooms, work-wear and laundering uniforms.

“It is quite a cyclical company and it is not very exciting,” says Martin, explaining that he bought shares when they were “under-rated and overlooked” – qualities that are something of a theme for this fund. Martin says it is another of the interesting turnaround stories he finds himself investing in, where a private equity management team came in to overhaul the company.

However, it is now trading at 17 times forward earnings, and Martin is conscious that the success of the company has started to become reflected in its share price. With shares priced at around 950p, he says the valuation is now looking “stretched”, and although Berendsen is still a good company there is limited upside left in its price.

This feature was written for our sister publication Money Observer