MIDAS SHARE TIPS: Renold makes chains for theme park rides and top bikes

MIDAS SHARE TIPS UPDATE: Link up with bargain firm Renold that makes chains for theme park rides at Alton Towers By Rosie Murray-west Updated: 22:31 BST, 15 July 2023 e-mail View comments When you post upbeat results, but your shares fall three per cent as the market rises, you might be forgiven for wondering what it is you’ve done wrong. Robert Purcell, chief executive of AIM-listed Renold, was bemused by the market’s reaction to his company’s results last week. ‘My honest view is that our shares are ridiculously cheap,’ Purcell told Midas after he posted stronger-than-expected figures for the fourth quarter.

On the up: Renold makes the chains for theme park rides at Alton Towers The chain-making business continues to forge its way through new markets and the only real downside in this week’s statement was that Renold decided against declaring a dividend. If you’ve not heard of Renold, that’s because its products are the unsung heroes within larger machines, rather than the standout stars themselves. British Cycling’s top bikes wouldn’t function as well without Renold Velo chains, while the world’s nuclear reactors also rely on its transmission chain to operate control rod mechanisms.

RELATED ARTICLES Previous 1 Next MIDAS SHARE TIPS: Put outsourcing company Serco on your. . .

Why star stock picker Terry Smith sold his Amazon shares -. . .

How has the UK stock market performed in the first half of. . .

How to diversify an investment portfolio but not diworisfy:. . .

Share this article Share HOW THIS IS MONEY CAN HELP How to choose the best (and cheapest) stocks and shares Isa and the right DIY investing account The company is integrating its recent acquisition, a Spanish industrial chain business known as YUK, which has meant taking on more debt but the company is sanguine as YUK is performing above expectations. Renold isn’t immune to economic headwinds and increases in raw material costs, but the order book is strong and the company believes that it has become more flexible, manufacturing locally to its customers to prevent supply issues, and having a large maintenance business rather than just relying on customers investing heavily in new equipment. Renold famously makes the chains for theme park rides at Alton Towers, and shareholders could be forgiven for feeling that they’ve been riding a rollercoaster for decades.

Renold’s shares are up 32 per cent since January, but at 29p they are well off the 121p when Midas tipped the firm in 2007 . The company has bitten off more than it could chew in the past, but there’s no evidence that it’s struggling to assimilate YUK at present, which is performing ahead of expectations. Midas verdict: British smaller companies aren’t in favour right now, but Renold has a strong combination of innovation and manufacturing expertise which should keep its order book strong.

The UK accounts for only seven per cent of revenue, too, meaning that our local travails shouldn’t affect it too badly. Renold’s valuation, at six times forward earnings, is undemanding, and though economic headwinds can’t be ignored, they shouldn’t blow this rollercoaster off course. Buy.

DIY INVESTING PLATFORMS Stocks & shares Isa Stocks & shares Isa Easy investing Capital at risk. Isa rules & T&Cs apply. Investment ideas Free fund dealing Free fund dealing 0.

45% account fee capped for shares Flat-fee investing No fees £9. 99 monthly fee One free £5. 99 trade per month Social investing Social investing Share investing 30+ million global community Model portfolios Investment account Free fund dealing Free financial coaching Affiliate links: If you take out a product This is Money may earn a commission.

This does not affect our editorial independence. > Compare the best investing platform for you Share or comment on this article: MIDAS SHARE TIPS: Renold makes chains for theme park rides and top bikes e-mail Add comment Some links in this article may be affiliate links. If you click on them we may earn a small commission.

That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Toggle Search POPULAR MONEY SECTIONS Take me to… Best savings rates tables Find the best mortgage calculator Power Portfolio investment tracker Stock market data and share prices This is Money’s podcast This is Money’s newsletter The best DIY investing platforms The best bank accounts The best cash Isas The best credit cards Save on energy bills Compare broadband and TV deals How to find cheaper car insurance Investing Show videos Financial calculators Search Enter search term Search Search within All articles Share prices Comments 0 Share what you think No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. Add your comment Enter your comment By posting your comment you agree to our house rules .

Submit Comment Clear Close Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. No Yes Close Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account.

We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy .

More top stories.