AGI is cheap, zero debt, & about to rally

by Michael Gable 02 April 2014

On Monday we added AGI to our model portfolio. These are the main points from our research report:

- Opportunity for growth in US and Asia, with 70-90% revenue growth, and >100% EBIT growth.
- Healthy profit margins (64% gross profit margin, 33% EBIT margin).
- Exceptional returns on capital, 29% ROA versus 5.5% cost of capital.
- Company is debt free.
- Trades on a PE of 16.4x next years earnings, versus 22.7x for Aristocrat.

In terms of the charts, it has pulled back in a large 3 wave decline from the October high of $3.79. It has just moved out of oversold on the RSI (circled). There is minor resistance at $4.10 but we expect the share price to head back to $4.70.



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.
 

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