Judges Scientific: Order book and operating leverage leaves room for more forecast upgrades

The second half forecasts implied by current consensus look very beatable given the state of the company's order book and its high operating leverage.

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I think Judges Scientific is a very good business and could possibly even stretch myself to saying it is better than that. The company makes scientific instrument machines and sells them to university research departments as well as industrial and commercial customers.

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Costco: A fine model of stakeholder capitalism

Costco is rightly admired as a business and an investment. Its future prospects look good but this looks to be priced into the shares.

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Costco is widely admired for its business model. For me, it is one of the finest examples of stakeholder capitalism in a stock exchange listed company.

The culture of the company is based on trying to do the right things for its key stakeholders of customers, suppliers, employees and shareholders. For example, it will pay good rates of pay with good benefits packages for its employees and increase them even if this puts a drag on profits.

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Valuation matters (eventually)

Great companies are not a buy at any price even if it feels like it. Phil repeats his concerns about the valuations of very good businesses and asks whether better opportunities now exist in cheaper shares.

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When I started my investing career nearly a quarter of a century ago, the prevailing wisdom was that to beat the market and get good results you had to buy cheap stocks. The problem with good stocks is that they were too highly priced and that the expectations of future performance were too rich and might not be met leading to disappointing returns.

The last decade or so has proved exactly the opposite.

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National Express: Stagecoach deal is good for costs but does little for growth

Taking over Stagecoach brings some nice cost savings but does not change the long-term growth potential of the business. On recovered profits, the shares may attract income seekers.

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The privatised UK bus companies were built on the back of many acquisitions. Former managers often bought the bus companies they worked for and then went about hoovering up as many local bus companies as they could until there were around five big players.

Many then went into privatised rail franchises and then overseas bus companies egged on by corporate financiers and shareholders who bought into the growth story. For most of them it has not been a happy story.

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Paying up for Oxford Instruments’ shares has paid off

Oxford Instruments' success in helping its customers research efforts has led to the creation of a very impressive business. Its products are tapped into some very favourable growth markets with bodes well for its future prospects.

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During my 10 years in the City as an analyst, I had the opportunity to meet lots of very capable managers and business leaders. Some of them had a lasting influence on the way I think about companies and investing in general.

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