The Investment column: Sterling Ind
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STERLING INDUSTRIES, like all small-cap engineers, has suffered from market neglect and the Asian crisis. It makes valves for hydraulic machinery such as JCBs, and burners for chemical plants and furnaces.
The shares fell 21p to 209p as profits fell by 9 per cent. Sterling's market cap of pounds 63.5m is now lower than last year's sales of pounds 74.8m, and it sits on a lowly p/e of just nine.
In spite of its small scale, Sterling is a global company. In the US, there is healthy demand for its hydraulic components. Asian recovery would lift its Australian division. And in the UK, forthcoming environmental legislation may fuel demand for its burners.
This would make for a good investment story - but for the pessimism of its management. Peter Buckley, the chairman, says there is "no certain path to better results in the year ahead". A buy, but only for optimists.
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