Hi, with the recent disappointing result, is this share a little overpriced? The fundamentals are not looking very good, but I see share price is holding on the support level. (But high PE ratio) Any views on the long term in this company and the industry? Thank you.
I bought GRF and AEG at the same time about 16 months ago. One is up 76%, the other i down 40%. Sold out AEG on Friday to utilise the loss. Don't think I'll get back in for a while on this one as the industry and more so this company is still sick.
in 2009, Aveng turnover was 34bn - and net margin was 6%. EPS came in at 540cps. In 2013 - Aveng showed a whopping R51bn in turnover - amazing top line growth - but net margin is less than 1% - eish! What do you say about a company that does 50% growth in its turnover but has 1/5th the EPS? I would say it is in a declining industry. Conventional strategies in these kinds of industries calls for mergers or takeovers. Watch this space ...
At PE of 21 this is high risk given results and state of industry. If you are keen on this industry there are other construction firms such as GRF, MUR ,RBX etc that offer better valuations and lower risk omo.