Business & Finance Magazine - September 2004

And still on the subject of food, we bring you the first in an occasional series where we look at some more unusual brand name companies and whether they are worth a punt. First in the list is Aga, the manufacturer of those oh-so-fashionable stoves which are synonymous with healthy country cooking.

Well, Aga isn't just a tried and tested brand name - it is a very healthy company and one that has taken the fancy of Patrick Lawless whose Appian Wealth Management has been a buyer of the shares. According to Lawless, Aga has a host of attractions and not just its flagship brand name.

For a start, Aga is currently trading on a p/e of just 10 against an average of more than 15 for the luxury goods sector. It is trading profitably, has a strong order book, has a healthy cash-rich balance sheet and has in recent times shifted the balance of its business into higher margin products and operations.

According to Lawless, Aga has very modest valuation for a luxury goods company and the modest rating together with a dividend yield of 3% makes the stock an interesting play in the luxury goods sector.