Thoughts on a couple of stocks please :)

Hi Sonja,

• HPI – Hotel Property Investments – owns a portfolio of pubs on long term leases to operators. Gearing of ~37% provides some flexibility, have been acquisitive and the balance sheet provides them some ability to add to the portfolio. Trading at a ~20% discount to NAV with an estimated yield of ~6.2% seems reasonable. Not screening overly cheap but likely to rally if/when interest rates come down.
• CAA – Capral Ltd – an aluminium products company, largely leveraged to the residential & commercial construction markets. It’s cheap, on ~6x FY24 PE, and a buyback in place. Their balance sheet is in good shape, but earnings are expected to go backwards over the next 2 years. We can see shares trading ~10% lower here however that would provide a good buying opportunity in our view.
• EGG – Enero Group – integrated marketing company that also screens very cheaply. This has some industry headwinds and earnings are expected to fall ~30% in FY24 before bouncing back. We can’t see any near-term catalyst for this one, it looks stuck in the range of the moment.
• SSG – Shaver Shop Group – a quality retailer, Shaver Shop has turned into a consistent performer with a good dividend yield, low debt and stable earnings. The recent pullback on the dividend looked a good buying opportunity. Trading on ~10x PE for FY24 with a ~7.5% fully franked yield is attractive.

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Shaver Shop Group Ltd (SSG)

LAST UPDATED 15/03/2024 15:22

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Shaver Shop Group Ltd (SSG)

LAST UPDATED 15/03/2024 15:22