Quarto: Illustrating a SuperStock

Last week, Ed completed the introduction to the Stockopedia Strategy Map by looking at SuperStocks – companies that have high Quality, Value and Momentum Ranks. Over the next couple of weeks, I will be taking a look at some of these SuperStocks in more detail. Starting with illustrated book publisher: Quarto (LON:QRT)

Summary

Quarto has had a turbulent decade with several boardroom bust-ups leading to management changes, ending up with Asian publisher CK Lau becoming an executive director and owning over 50% of the equity.Since Lau has been an executive director of the company, the EPS has almost trebled, and the company has had a ROCE that has averaged over 20%, indicating that with him at the helm, it is well-run and has maintained a solid competitive advantage.Despite this strong recent track record, the company trades on a P/E of less than six.In the past, the company has been heavily indebted. However, the combination of a rights issue in 2020 and good operational cash flow have all but eliminated the debt.However, there are reasons for investors to be cautious. Lau, together with major Italian book publisher Giunti, own over 70% of the company. While they have no history of...