Founded: 1970, ASX code: KOV, homepage: www.korvest.com.au
Overview:
Korvest Limited is a small south Australian metal manufacturer based in Adelaide. Its major activities are hot dip galvanising and general sheet metal fabrication. The company also produces Ezy-Strut cable and varioius pipe support systems.
- Analysis of latest annual report (June 2006):
- Market Cap: Depending on the daily stock price the market cap of this company is about $50mil in approx. 8.53mil of outstanding shares.
- Shareholders Equity: $19.3mil making the stock’s book value approx. $2.26 per share (12.2% growth on year ending June 2005). From that about $12.6mil. ($1.48 per share) is available working capital.
- Earnings per share: $0.48 making the average EPS growth in last 3 years about 21.6%
- Return on Equity: 21.4%, averaging around 19.2% in last 3 years
- Balance Sheet: Working capital of $12.6mil versus total debt of $0.04mil
Sharemarket’s view:
Historical average Price to Earnings ratio of 9 suggests the share price around $4.3 ($0.48 EPS x 9 P/E).
-
GROWTH STOCK:
- Conservative forecast of average EPS growth in next 10 years: 15%
- Share price in 10 years time: about $18.2 (EPS in year 10 based on forecasted yearly EPS growth times average P/E)
- Total shareholders return in 10 years times: $23.8 (share price of $18.2 plus $5.6 of all the dividends if current payout ratio of 50% persists)
- Rate of Return in next 10 years based on the beginning of February 2007 price of $6 per share: 14.8%pa
PROS AND CONS:
+++ Very strong balance sheet
+++ Good Returns on Equity
+++ Good strong EPS growth
— Only a small management ownership
— Small enterprise in cyclical industry
Further information about Australian Stock Exchange www.asx.com.au
Entries (RSS)