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Thanks Gary, puts a smile on my face to hear that we’re positively impacting subscribers knowledge & returns. Regarding ASB, the stock is cheap as shown via the P/E chart below and the FY21 result this week was as to be expected – in my view at least.
The issue is around their shipbuilding order book – it needs replenishing. Having spoken with management during the week, I can assure you this is their focus and is the principal reason they are co-investing (with the US Navy) in steel shipbuilding capabilities at their yard in Mobile, however the current book is in decline. The order book stood at $2.5bn at the end of June, versus $2.9bn at the end of December and $4.3bn at the end June 2020. We can look at this in two ways, buy the stock now when it’s cheap because the market is concerned with this trend, or back management to win contracts, and if they do there will be the associated earnings uplift plus the re-rate in the P/E multiple which would lead to a large rally in price. We own the stock in our Emerging Companies Portfolio and are backing the latter.