Capita’s share price is ‘profoundly’ undervalued in the view of star fund manager Neil Woodford. During an update reflecting on the February performance of the Woodford Equity Income Fund, he noted:
Meanwhile, shares in Capita put in a more encouraging performance during February, following a series of profit warnings in 2016. We have said before that we were disappointed by events at Capita last year, which combined to undermine market confidence in the business and the credibility of management forecasts. We have spoken to management several times as these issues have unfolded, including a recent conversation with the new chairman who appears keen to ensure that the business takes appropriate steps to move on from last year’s challenges. In our view, Capita’s share price continues to profoundly undervalue the fundamental long-term attractions of the business. It will take time to rebuild credibility and value at the company but we believe the management changes announced earlier this month will mark an important step on that journey.
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