Star fund manager Nick Train likes this stock. Would I buy?

first_img When Nick Train, referred to as ‘Britain’s Warren Buffett’, adds a new UK stock to his portfolios for the first time in nine years, I sit up and take notice. The stock in question is FTSE 250 consumer goods firm PZ Cussons (LSE: PZC) that he bought in late 2019.PZ Cussons owns around 30 brands including Morning Fresh, Imperial Leather and Original Source. But it has been struggling for years now with declining financials, a stagnating dividend and a falling share price.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…So, what is Nick Train seeing in this battered consumer goods company that the market is missing? Let’s take a closer look.An atypical Nick Train purchase?PZ Cussons is in a sector of the market where Nick Train invests heavily. He already owns shares in a number of consumer goods companies including Unilever, Reckitt Benckiser and Diageo.But that is where the similarity seemingly ends. Train invests in companies that have generated lots of cash over long periods of time. He operates relatively concentrated portfolios of around 25 companies that display long-term growth potential.However, revenues at PZ Cussons has been trending down for five years now slipping from £821m in 2016 to £689m last year. This mirrors falls in earnings and cash flow.2020 is shaping up no better, and despite high demand for Carex hand wash and Imperial leather soap during the coronavirus pandemic, social distancing measures have reduced demand for products such as St Tropez self-tanning.Is Nick Train betting on Nigeria?Nigeria is a critical market for PZ Cussons. As its economy has struggled, Nigerians have had less income to spend. This has resulted in a drop in revenues at PZ Cussons’ personal care and home care divisions.But Nigeria is a huge potential growth market and I believe it is this expansion that Nick Train is betting on. Recently, it was predicted that by the end of this century, Nigeria would be the world’s second most populous country. The population is young and growing fast and PZ Cussons has the number one and number two brands in the market. If the Nigerian economy starts to recover as well, we could see revenues increase significantly over the years.Train may also view the depressed share price right now as an opportunity to take a long-term position at a bargain price. Unilever, Reckitt Benckiser and Diageo all have P/E ratios in the high teens to low 20 versus a P/E of 14 for PZ Cussons. While still not a bargain, this is significantly lower than both its historical average and the industry average.With Jonathan Myers having joined the company in May as its new CEO, this could herald the start of a change of fortunes for PZ Cussons. Nick Train certainly believes so, but until that turnaround kicks in investors will be handsomely rewarded with a dividend of around 4.4% for their patience. I’d buy. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares David Barnes owns shares in PZ Cussons, Diageo and Unilever. The Motley Fool UK has recommended Diageo, PZ Cussons, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by David Barnes Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img David Barnes | Friday, 17th July, 2020 | More on: PZC Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Star fund manager Nick Train likes this stock. Would I buy? Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.last_img read more