I first bought Waterman on October 22nd 2009. I had recently sold Harvard International for a profit of £4,102.82 and needed somewhere to put the proceeds and some additional cash. Waterman marked a slight change in my rules. Whereas before I would only invest when a company was trading below 2/3 of tangible book, I decided to allow intangibles into my valuations.
The idea is that on average intangible assets do produce economic benifits (i.e. earnings) to justify themselves. I have no evidence to support this other than that the majority of companies I have looked at have traded above book value, including intangibles, at some point in the last five years. Allowing intangibles into my valuations also expands on the sorts of companies I can invest in, such as Waterman. Waterman an engineering and environmental consultancy group where goodwill has been paid for mergers or aquisitions in the past.
A much more extensive and interesting report on Waterman has been recently written up by Richard Beddard whose Thrifty 30 is broadly similar to what I’m trying to do, but is very different in that it’s earnings rather than asset driven.
This purchase has already been updated onto my Trade History.