Kresta Holdings (ASX: KRS)
Consumer spending has been waning in Australia lately,and given its exposure to consumer spending trends, window treatments company Kresta Holdings may seem like an unlikely investment. choice right now. But there are a few factors that suggest that investors shouldn't pull down the blinds, just yet!
Fund managers at Hunter Hall and Perpetual have been buyers, building substantial stakes in Kresta in recent months. Hunter Hall moved to more than a 19% holding in March and Perpetual increased its stake from 7.39 % to 8.43% in June. These increased stakes came at a time when consumer spending was weakening.
It is possible that investors such as Perpetual and Hunter Hall regard Kresta as a likely takeover target. Kresta's established brand name and strong market share in curtains and blinds could make it attractive to a trade buyer in an associated market. Another possibility is that its discounted share price means that there's scope for a cash offer from a private equity consortium, perhaps at a premium.
Kresta's management recently appointed specialist external advisers to help management enhance its shareholder value. This indicates that they may be aware that the company presents a potential takeover target.
With a market cap of $34.6m, a dividend yield of 9.6% and currently trading on a P/E of 6.7 Kresta Holdings looks like a good buy.
This is a well run company with a solid business model. With a dividend in excess of 9%, its worth taking a punt on this one.
Buy Kresta Holdings (KRS:ASX)