Artemis fund manager Adrian Frost has called for companies like BP to shrink their assets to improve growth prospects.
Frost says that even on a 20 year view the share price had not done very well and highlighted the success of some of the asset sales following the disaster.
He says: “The premium achieved on some of those sales were 30 per cent to 40 per cent over analyst valuations. I look at BP’s discount to net asset value, at around 40 per cent, and ask whether the share price will get close to NAV again. I would say the answer is no”.
Frost adds: “I like to see big companies shrinking so that what they have left will grow a bit faster. Plenty of companies have a market share as high as they get. If I was to choose sectors that should shrink, it would be consumer goods and pharmas.”