A sell-off at industrial fastenings outfit Trifast looks unjustified, according to analysts at N+1 Singer.

The stock, which is the largest holding in Keith Ashworth-Lord’s Buffettology Income (GB00B3QQFJ66) fund, has slipped 14% over the last month from 112p to 96.5p.

‘We struggle to explain this move,' writes analyst Jo Reedman. ‘The industrial engineering index moved broadly sideways over this period, while distributors such as Acal (ACL), Brammer (BRAM), Electrocomponents (ECM) and Premier Farnell (PFL) have seen their share prices increase by 7-15%.’

TRIFAST - Comparison Line Chart (Rebased to first)

‘Meanwhile, commentary from the 2014 UK results season noted positive conditions in Trifast’s end-markets of automotive and consumer electronics.’

Speaking to Shares in February, executive chairman Malcolm Diamond said his main priorities were growing market share, integrating VIC, an Italian business acquired at the end of 2014, and succession planning for when the current management team leave.

‘I have no plans to leave and neither does Jim [Barker, chief executive] but we are lining up potential successors,’ he said.

He added it was particularly important to have replacements on stand-by at Trifast because of the unique culture of the company. He blames some of the company’s earlier struggles on failure to organise management succession effectively.

Reedman at N+1 has a ‘buy’ rating on the stock and a 124p target price. She forecasts earnings per share of 8.2p for the year ending 31 March, up 37% from the year before. EPS is forecast at 8.8p the year after.

Shares highlighted Trifast in August 2014 as a stock with significant earnings momentum.

Issue Date: 16 Mar 2015