Victor Kiam famously liked the Remington shaver so much he bought the company. Those who know me well will read a similar motivation into my latest share purchase, the brewer and pub-chain owner, Marston’s.

Now it is true that I am a fan of Marston’s Pedigree, and no less an admirer of Jennings Cumberland ale, which has been part of the Marston’s portfolio since the brewer was taken over in 2005. I can personally recommend the Jennings ale as the ideal anaesthetic after a hard walk in the Lake District. I will draw a veil over the ghastly Marston’s Smooth, which has infested every test match venue in the country since Marston’s became “the official beer of England cricket”.

However, the decision to pick up some shares owes nothing (well, almost nothing) to the product and everything to the price at which they trade. Quite simply, Marston’s looks like a classic value proposition — an unloved company with a strong underlying business, good assets and management.

It is well documented that dozens of pubs are going out of business every month while beer sales are flat at best. Investing in a brewer or a pub chain is about as fashionable right now as donning a polyester suit and a pair of winklepicker shoes. It is not the sort of thing you parade in public if you want to retain your credibility. But I have no hesitation in going against the herd.

I see a parallel here with the situation at Mitchells & Butlers when I first bought into that pub and restaurants chain in early 2004. The industry then was experiencing big pricing pressures and an acute margin squeeze. M&B shares were trading at a discount to the break-up value of the business. Over the next three years they more than trebled (though I had already sold half my holding for a “mere” 100% profit).

Today, Marston’s, too, can be picked up for less than break-up value. Even after allowing for a £40m writedown on the value of some of its city centre leaseholds, announced with the recent year-end trading statement, the company boasts net worth of about 140p a share. That compares well with a current share price of about 90p.

I bought the shares a couple of days before the Office of Fair Trading was due to decide whether to refer the brewers’ tied supply arrangements with their tenants to the Competition Commission. I was prepared to bet the OFT would decide it was a waste of time to do so. I was right, but the news was obviously discounted as it didn’t make any difference to the share price. It is, however, one fewer obstacle for a brewer with a large number of tied outlets, such as Marston’s, to overcome.

The recent trading statement was generally positive. Marston’s is getting good growth in its premium beers and managed to double sales of bottled Pedigree in the second half of the year (to October 3). The managed pubs have picked up, too, on the back of growing food sales. But the tenanted and leased pubs are still struggling and Marston’s is trying to sell about 100 of them.

Back in July, the company raised £165m from its shareholders to speed up pub developments. That was highly unpopular at the time but the Marston’s management has form for developing pubs successfully. It has built more than 30 in the past five years, using something called the “F Plan” — focusing on “food, families, females and forty-fifty-somethings”. If it can simultaneously shift some of the bottom-end tenancies now on the market, an accelerated development programme will do a lot to lift the overall quality of the estate. Marston’s shares offer a decent income. On the anticipated dividends for next year, they should return about 6.3%. That is worth having in the current environment. I don’t expect them to shrug off their pariah status in a hurry, but there is a worthwhile income to be had in the meantime.

I funded my purchase of Marston’s shares by selling another tranche of Lloyds 6.0884% preference shares. This time I got £570 a share, £40 more than I achieved when I sold the first lot in September. I still have about 35% of my original holding here and will stick around to see whether an attractive exchange offer for the prefs emerges as part of the giant rights issue that the bank is expected to announce this week.

If there is no such offer, holders can at least look forward to an imminent dividend payment. The prefs went ex-dividend on Wednesday and payment of the half-year dividend is scheduled for November 12. That will make a worthwhile contribution to the Christmas fund.

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