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Share Watch: Glass half empty at Saint-Gobain as the critics wait for more action

 

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The coronavirus outbreak has thrown the market into turmoil. The impact of the virus has made the future uncertain and it is very likely that the market could fall again. However now is the time to examine potential buys for the time when the market settles.

I was throwing my slide rule over the investment potential of the famous old French group Saint-Gobain recently and got to thinking about the wealth of history that the Gallic glass-maker has stashed away in its ledgers. Its longevity alone (350 years - and still going strong) makes it remarkable. An early patron was the Sun King himself, Louis XIV, whose agents spectacularly broke the age-long Venetian monopoly on mirror making; but what, I asked myself, would the Sun King think of the possibility that activist investors are tricking about with the structure of his favourite glass firm? Remembering the short shrift he gave to many European rivals, he would probably be less than happy to hear Saint-Gobain described as 'unwieldy, bureaucratic and under-performing'.

The sheer scale and diversity of Saint-Gobain ensures that the financial engineering specialists have it under regular scrutiny. It has revenues of €42bn and a market value of €14bn, employing 200,000 people with operations in 50 countries. It is Europe's largest flat glass producer, a world leader in plaster board and one of Europe's largest builders' providers. The group is also a manufacturer of iron pipes, ceramics, insulation, bicycle bearings and seals for space craft. It also operates gypsum quarries, one of which is in Kingscourt in Co Cavan.