GMG
Hi looking at the chart on GMG it's telling me to sell and take a loss what are my reasons for keeping GMG and buying more ? Thanks and enjoy your week-end Glenn
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Answer
Hi Glenn,
Goodman has more characterises of a tech stock now than the property stock it once was. This makes sense, as it moves from building big sheds, to high tech data centres. But, this does change how it will trade, and we expect deeper lows, but greater highs.
GMG is now on 22x FY25 earnings, that will grow at a rate of at least 10%. This valuation is on the lower side of GMG’s history, and in our view, it’s attractive. From a timing/trade perspective, we are reticent to cut our position because the price has gone down, we view it as such a high-quality operative.
In a more general sense, we have been looking for a “washout” style sell-off in the crowded “momentum trades” of 2023/4, targeting such a sell-off to increase our exposure, i.e. buying when there’s blood on the streets – even when it’s our own!
- We are bullish GMG into weakness ~$28, initial looking at least a 20% bounce in the latter part of 2025. If we did now own it, this is the level we would be buying it.
