P/E 10.8 PEG Ratio 0.3 Very low debt. Solid past and forecast EPS growth
This from www.BuySellTips.com
07 April, 2008 (16:00:00 AEST)
SAFEROADS HOLDINGS PLUNGES 7.6%, IN SIGNIFICANT DOWNTREND April 07, 2008 16:00:00 AEST
Saferoads Holdings (SRH) plunged 20.0c (or 7.6%) to $2.45. Compared with the All Ordinaries Index which rose 20.4 points (or 0.4%) on the day, this represented a relative price change of -7.9%.
TECHNICAL ANALYSIS Significant Downtrend Price Trend: In the last three months the number of falls outnumbered rises 31:19 or 1.63:1. Relativities: Since open its percentile rank in the Australian market was 7. In the Australian market of 2,091 stocks, the stock has a 6-month relative strength of 58 which means it has outperformed 58% of the market. Moving Average Price (MAP): The price to 200-day MAP ratio is 0.87, a bearish indicator. In the past 200 days this ratio has been under 0.87 just thrice suggesting a support level. The stock is trading below both its MAPs and the 50-day MAP of $2.67 is lower than the 200-day MAP of $2.80, a bearish indicator. The 200-day MAP has decreased to $2.80. A decrease is another bearish indicator. Breakdown: The bears are maintaining control with price open, high, low and close being below yesterday's levels. Support: The support price is hovering at the $2.35 level. Volume traded at the weak support price zone was 0.7 time average during the single occasion when the support price was breached. In the last one month the first low was at $2.35 on Mar 11. Resistance: In the last one month the high was at $2.79 on Mar 10.
PRICE VOLUME DYNAMICS Volatility: The stock traded between an intraday high of $2.64 and a three-day low of $2.45. This suggests a trading opportunity between peaks and troughs. Volume and Turnover Period: There were 13,655 shares worth $33,651 traded. The volume was 0.6 times average trading of 24,693 shares. The turnover rate in the 12 months to date was 23.8% (or a turnover period of 4 years 2 months). This average length of ownership of the stock at 3.9 times the average holding period of 1 year 30 days for stocks in the S&P/ASX 200 Index suggests a larger number of core investors, making a long-term investment safer. % Disc to Hi and % Prem to Lo: The last price is at a discount of 30.0% to the 12-month high of $3.50 and a premium of 15.0% to the 12-month low of $2.13. Volume Weighted Price (VWP): The price is about the same as its 1-month volume weighted average price of $2.48.
PRICE PERFORMANCE RANK IN INDEX AND SECTORS The stock is in 1 index and 5 sectors. The following sectors fell setting the trend for its fall of 7.6% (rank by percentage price change of stock for 1 day;6 months in sector/index in brackets): Industrials Sector (rank 693;283 out of 1068) which was down 30.6 points or 0.6% to 4,931.8, Capital Goods Sector (rank 71;30 out of 98) which was down 38.7 points or 0.5% to 7,462.4 The stock's fall went against the trend set by the following index and sector: Newly Listed Companies Sector (rank 107;38 out of 201) which was up 10.8 points or 0.2% to 5,170.6, S&P/ASX 200 Industrials Index (rank 125;53 out of 187) which was up 5.2 points or 0.1% to 5,662.
RELATIVE VALUATION INDICATORS [RVI] Saferoads Holdings vs Industrials Sector [Industrials Sector Average in Brackets] Better than Sector Average: Return on Equity of 37.9% [21.2%]; rank 66 out of 1071 Industrials stocks; Return on Assets of 22.7% [7.2%]; rank 57 out of 1083. Worse than Sector Average: Year-on-year growth in EPS of 41.6% [44.6%]; rank 116 out of 369 Industrials stocks; P/E of 13.8 [11.1]; rank 186 out of 387; Yield of 1.8% [4.2%]; rank 327 out of 370 Industrials stocks with dividends.
SHAREHOLDER RETURNS Trailing One Week: The stock was unchanged twice (40% of the time), fell once (20% of the time), rose once (20% of the time) and was untraded once (20% of the time). The volume was 0.4 times average trading of 123,465 shares. Trailing One Month: The stock fell eight times (42% of the time), was unchanged five times (26% of the time), rose four times (21% of the time) and was untraded twice (11% of the time). The volume was 0.5 times average trading of 543,246 shares. The value of $1,000 invested a month ago is $875 [vs $1,060 for the All Ordinaries Index], for a capital loss of $125. Trailing One Year: The value of $1,000 invested one year ago is $1,094 [vs $969 for the All Ordinaries Index], including a capital gain of $79 and dividend reinvested of $15. The total return to shareholders for 1 year is 9.4%.
FINANCIALS Annual Report for the year ended June 30, 2007 (year-on-year comparisons with previous corresponding period)- Favourable Changes: total revenue up 53.2% to $A40.8m ($US32.2m); net profit growth 54.8% to $A4.5m ($US3.5m); EPS growth 41.6% to $A0.2 (14.0c); a track record of profits in 3 of the last 3 years; NTA per share up 76.2% to $A0.4 (29.2c). Unfavourable Changes: interest cover down 21.2% to 223.4; total debt to net tangible assets up from 3.7% to 5.8%; total liabilities to EBITDA up 53.0% to 1.2. While this compares favourably with the Joseph Piotroski benchmark of 5, the trend is unfavourable; total liabilities to operating cash flow up 88.1% to 3.2: this also compares favourably with Joseph Piotroski benchmark of 4; debt to equity up 28.8% to 0.05; total liabilities to total assets up 0.9% to 0.4; current ratio down 4.9% to 2.0; total number of shares outstanding up 9.9% to 25,269,300. Major Common Size Ratios: total current assets to total assets down from 80.4% to 76.2%; fixed assets to total assets down from 18.1% to 12.5%; intangibles to total assets up from 0.7% to 10.8%; cash to total assets up from 0.2% to 3.1%; EBITDA to Revenues up from 16.3% to 16.6%; EBITD to Revenues up from 16.2% to 16.6%; EBIT to Revenues up from 15.5% to 15.7%; profit before tax to revenues up from 15.4% to 15.6%; profit after tax to revenues up from 10.8% to 10.9%.
FUNDAMENTALS Earnings: The earnings yield of 7.2% is 1.2 times the 10-year bond yield of 6.0%. P/E: The trailing twelve months P/E is 13.8 times, giving it a percentile rank of 56.7 by P/E. It therefore represents better value than 56.7% of other Australian stocks with earnings (rank 216 out of 499). P/E/G: Based on the year-on-year growth in trailing 12 months EPS of 41.6% the P/E/G is 0.3. This is a bullish signal, being less than 1.0. EPS growth: The implied future growth rate of earnings per share required to justify the current Price Earnings Multiple of 13.8 on trailing twelve months is 5.2%, based on a formula devised by Benjamin Graham. This is lower than the year-on-year growth rate in eps of 41.6%, suggesting the stock may be undervalued. P/S: The price/sales ratio is 1.5. Price to NTA: The price to net tangible asset backing per share is 6.6. Dividend Yield: The company paid a dividend of 4.50c in the last 12 months. The dividend yield of 1.8% compares unfavourably with the Total Australian Market average of 3.5% and has a percentile rank of 16.6 in the Total Australian Market. (rank 363 out of 435). Investment Return: The nominal investment return, defined by the sum of 1.8% yield and 41.6% earnings growth, is 43.4%. After allowing for inflation of 3.0% the real investment return is 40.4%. The nominal investment return divided by the average P/E is a multiple of 3.1, which compares favourably with the benchmark of 2.
ISSUED CAPITAL Based on 26,000,000 issued shares the market capitalisation is $64 million.
ACTIVITIES Manufacture, import and distribution of road safety products.
BUSINESS NEWS ROUND UP The last 5 snippets from News Bites were: March 27: Saferoads acquires New Zealand distributor Saferoads Holdings Ltd subsidiary Saferoads Pty Ltd will acquire its New Zealand distributor and the business of Trans Tasman Engineering Ltd which is also the exclusive distributor in New Zealand for Quixote Corporation USA.The consideration is $130,000. The acquisition will establish the company's direct representation in New Zealand.
February 24: Saferoads buys traffic signal equipment maker for $3.1m Saferoads Holdings Ltd will acquire the net assets of Bob Panich Consultancy Pty Ltd (BPC) and its related entities. BPC produces and supplies an extensive range of traffic signal equipment. The consideration is $3.1 million plus stock, on a 3x EBIT multiple, will be funded from a debt facility with the Commonwealth Bank.
January 30: Saferoads H1 profit up 33% Saferoads Holdings Ltd announced for the half year ended December 31, 2008 net profit was $3 million, up 33 pct on sales worth $28.05 million vs $17.1 million last year. A 5c fully franked dividend was announced. The increase in sales was mainly due to organic growth in all mainland states and in all product divisions.
October 12: Invesco buys 400k Saferoads shares
August 13: SAFEROADS HOLDINGS NET PROFIT UP 55% TO $4.46M; REVENUE UP 53% TO $40.7M Saferoads Holdings Ltd net profit increased 55 percent to $4.46 million for the year to June 30, 2007, on revenue up 53 percent to $40.7 million. A final fully franked dividend of 4.5c was declared, consistent with last year. Record date for entitlement to the dividend is October 24, 2007, and payment will be on November 7.
Currency Conversion: Australian Dollar AUD 1 = US$ 0.9235 [or US$1=AUD 1.08]; Against the US$ the AUD increased 40.23 basis points (or 0.4%) for the day; added 1.2% for the week; was unchanged for the month; soared 20.7% for the year.
Source: www.BuySellTips.com
SRH Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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