Is Austal a takeover target?
Thanks for the new website. Still trying to get full use out of it. Is ASB - Astral, likely to be a US company takeover target
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Answer
Hi Paul – yes, there’s a bit more to it than the last site.
Like all stocks that get hit hard, there are investors out there that look through short term pain and use the weakness to take the company out at a lower premium than if the short term trends when favorable – Crown an example here.
ASB is a potential takeover target however because they work so closely with the US navy there would be more complexity around this. An existing US navy supplier would be the more natural fit.
At the moment I see a few issues with ASB, although I think these are now well and truly in the price and the stock is a buy around $2.40
1. The order book is declining
2. There are investigations going into past works = reputational damage
3. Sustainment work, or maintenance has also been softer than expected
These issues go away with a few contract wins.
