I see a 20 cent target or about $100m market cap. This is the combination of good factors at play here, from the new name and attitude to Bloomer and to Meadowbrook. The recent announcement gave a very strong sense that this business has turned a corner. Bloomer will be a long term growth story as it expands into new states and businesses. McGrath seems to be turning around to, with the Onslow contract and Meadowbrook's approval. This could see long term growth for McGrath in over-55s style modular construction and there appears to be no end in sight for growth in that sector.
Also, the whole is much greater than the sum of its parts with this business. What management is demonstrating is an ability to tick all of the critical boxes for a business turnaround, i.e. stopping the losses, closing the unprofitable businesses, erasing legacy items, identifying new businesses and having the courage and ability to convert them and consolidate them successfully.
NOD Price at posting:
6.9¢ Sentiment: Buy Disclosure: Held
