Date of Data Capture:11/5/2018
Name:BINGO INDUSTRIES LTD (BIN)
Current Price: $2.88
Market Capitalisation: $1.20B
Forecast EBITDA Growth: 25.00%
Yield Estimate: 1.68%
Consensus Price Target: $3.13
# Covering Analysts: 4
Discount at Current Price: 8.68%
Price Target Trend: Increasing-Flat
TrendBias: Up-Flat/ Medium-Short
Set up Notes:
· Strength should be an easy thing to buy but it usually isn’t – here we are looking at a strong combination of fundamental performance and growth combined with a strong technical setup.
· Performance has been very good since listing early in 2017with strong sales, margins and earnings set to drive forward through to 2020 with aggressive growth set to continue.
· Technically robust BIN has been cycling higher through a major medium-term uptrend, increasing value by around 60% in the last year.
· Analyst sentiment is strongly positive with increasing price targets aiming above $3 resistance overhead, with good support layered down to $2.50 from here if needed.
Growth Focus: Bingo Industries Ltd (BIN)
Our primary focus here is capital gain, we will select our stocks from the ASX Top 500 All Ordinaries Index
We normally avoid rubbish stocks... except when they have excellent growth potential like Bingo Industries Ltd (BIN) which is when we take a “waste, yes/want, yes” approach.
Starting out as a family business in 2005 with 4 trucks, BIN has grown into a $1.2B company with over 250 trucks operating a diverse and integrated waste and recycling company. Based in Sydney with a strong NSW focus, Bingo services the building and demolition industries as well as catering for domestic, commercial and industrial operations and has been making some early stage moves into Victoria and Queensland.
Performance has been strong in the last year with revenue growing by 43% and earnings by 40%. BIN carries forecasts for earnings growth of 25% this year and strong expectations for continued growth out to 2020. A great deal of this growth has been organic, though Bingo have also done the rounds to pick up some strategic acquisitions. With a growth strategy targeting cross-border markets in Victoria and Queensland there should be plenty of room for further growth through either trash or treasure with favourable sector forecasts and opportunities to consolidate a fragmented market.
Of particular interest is the potential shift to own-state processing in NSW that would halt transporting rubbish into QLD, something Bingo has been preparing for through the purchase of the Paton’s Lane site which could be developed into a processing site within NSW. This combines well with the other acquisitions of NRG, Konstruct Recycling, Resource Recovery Victoria and AAZ Recycling as they look to build their national exposure and brand.
Pricing history shows a strong 12 months and 60% rally from their listing date of May 2017 and initial float at $1.80. The uptrend playing out in the medium timeframe has good tracking correlation in the short-term and shows a constructive rally unwinding within a cyclical uptrend. There are no sell signals present as yet and while we do see major structural resistance setting in at the obvious psychological level of $3.00, we also think Bingo have it in the can to continue lifting the lid off expectations.
We see good momentum building here with buy signals being indicated the over the long-to-medium-term, even though we do see some extension and overreach in the short-term daily timeframe. This means there could be short-term pullback, but this could easily be swept up and away by the longer-termed positivity. Overall we think this is an exciting opportunity that brings together a strong fundamental outlook and an exciting technical viewpoint that makes us not want to curb our enthusiasm.