Is PWH a buy?

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Question asked 28/08/2021

Is PWH a buy?

Hi James and Team,

Loving the updates please keep up the great work. In lockdown I turned to a bit of Netflix to fill in the time and came across the series Drive to Survive. I got hooked, did some further research and came across PWR Holdings (PWH). They released their results on Thursday which I thought were quite positive but not a whole lot of market reaction. The emerging technologies space they are heading into seems to be growing quite rapidly. So I guess my question is do you like the company and if you think they can continue on their current growth trajectory? (General advice only).

Thanks

Jack

Answer

Hi Jack,

The market just needed a few days to digest the numbers, it looks great now! We would describe the business as one which provides high tech cooling solutions for the automotive industry with this QLD based company now enjoying a market cap of $830m. The US is it’s major growth market which underpinned last weeks earnings report which showed revenue up over 20% to almost $80m flowing down to a NPAT lift of ~28%.

While they did not provide guidance and they talked to Covid challenges that has become the norm this reporting season, we are much better off looking at their actions rather than their words and a planned increase in headcount from 363 people to 450 is a strong indication that they see an opportunity for growth and are jumping on it. This is a company I have looked at a number of times for the Emerging Companies Portfolio, it reminds me of ARB at an early stage, they’ve even got the annoying slight difference in their name v their ASX code which ARB had for a long time. We like the company’s direction and are bullish although we would prefer to buy pullbacks in the strong uptrend.

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PWR Holdings (PWH)

LAST UPDATED 27/08/2021 18:00

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