Morgan Sindall Group PLC (LON:MGNS)

I purchased Morgan Sindall Group PLC (LON:MGNS) for the UK Portfolio. The construction company has a high proportion of long-term revenue streams, a strong balance sheet and its stock trades on an earnings multiple of 7.5. Market sentiment towards the sector is weak following the Carillion bankruptcy last year. The blow up actually benefits Morgan Sindall because balance sheet strength is now a key consideration in awarding tenders where previously the key factor was price. Consequently, the company is enjoying improving margins. The changing environment means Morgan Sindall is becoming a better business while its share price offers good value even if this wasn't the case.

I used to work under Morgan Sindall's CFO Steve Crummett and he taught me how to do a cash flow model. He is a straight shooter.