John Royden, Head of Research
52 week high yield£43.32– £30.38
Hist / pros per26.9–23.3
Equity market cap£6,875m
Intertek is one of those companies that piggy backs on global trade. Technically the company is a global leader in testing, inspecting and certifying products, commodities and services. For a practical example consider a Chinese manufacturer of toy cars wanting somebody to (a) advise them on European toy safety legislation and then (b) certify to the UK customer, Toys R Us perhaps, that the toy cars are compliant. Intertek does the job. Alternatively, if you are delivering a shipment of soybeans and you need moisture and fungus-free certification then Intertek is who you call.
Back in April, Trump and Xi Jinping started their Mar-a-Lago meeting with the world fearful that Trump would impose trade restrictions on China. They actually ended up promising more global trade rather than less of it.
It looks as if the Chinese are going to allow more agricultural imports, concessions on opening up the financial sector and easier foreign investment. Trump tweeted: “outstanding relationship with President Xi Jinping. I think truly progress has been made...lots of very potentially bad problems going away.”
So if we are to judge world trade’s prospects on the tweets of the President, this seems to bode better than expected.