Amalgamated Holdings (AHD) Flying Under the Radar

by Michael Gable

Key factors underpinning our positive view on AHD include:
 
1. Higher Return on Assets (ROA) in Hotels division, supported by performance of QT Hotels, notably QT Sydney, and improvement in the profitability of Rydges, with management stripping out costs. 
2. Strong operating cashflows, coupled with an excellent strong balance sheet have enabled the Company to undertake both maintenance and expansive CAPEX, maintain a dividend payout ratio of 60-80% and still generate positive net free cashflows. 
3. Conservatively managed, with negligible net debt. 
4. Defensive earnings profile in the event of a downturn in economic conditions
5. Attractive trading multiples in comparison to peers
 
Charting View

AHD looks as though it broke out of a continuation pattern in February this year and is therefore on course to continue heading higher. It appears to have hit some short term resistance though, so we may see it pull back in the short term. We have some very strong support at $8.50 but it may not get that low. Once it gets going again, there is a possibility of the current rally extending up towards $10, based on the size of the movements leading up to this point.

Disclaimer

Disclaimer: Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.