Questor share tip: the company’s growing margins, solid finances and low valuation make it a worthwhile long-term purchase
A haze of negativity currently hangs over the stock market. Investors are deeply concerned about the impact of rampant inflation, rapidly rising interest rates, impending tax rises and catastrophically weak consumer confidence on corporate profitability.
This is not the first time such a situation has arisen. Certainly, extreme levels of inflation and rapid interest rate rises have not been seen for many years. But deep-seated feelings of fear and negativity among investors are nothing new. In fact, they have occurred with surprising regularity, only to dissipate as the economy’s prospects gradually improve.
For long-term investors who can look beyond short-term risks, widespread stock market fear brings countless opportunities to buy excellent companies at a fraction of their intrinsic value. Bold investors, for example, can currently buy stocks such as the FTSE 250’s IMI at a discount of 27pc to the market value at which it started the year.
The specialist engineering company designs and manufactures products that control the precise movement of fluids. It operates across a wide range of industries and regions and has excellent long-term growth potential as environmental, demographic and technological change presents new areas of high demand for its products.