Hmmm .....ASH is up 200% since the April all time low . Amongst...

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572 Posts.

09/11/17

06:11

Post #: 28626480
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Originally posted by mal85 ↑

Bought in after following this stock for the best part of 2 years.

The investment case in short:
- aligned management
- no debt
- ascribing no value to training segment, you get a rough EBITDA of 8m+ on the labour hire business alone which has shown substantial operating leverage as revenue grows (0.8% margin growth in a low margin business is phenomenal!).
- Assuming macro environment continues to improve, as unemployment drops the labour market will presumably be tighter - allowing additional scope for this sort of business to prosper.
- the labour hire business has actually been growing quite quickly and is being masked by the decline in training division. This growth has continued into Q1 this FY. After rebasing, generally this sort of growth and operating leverage would command a higher PE multiple than the market average.

Key risk is obviously the lawsuit although I think it is well and truly baked into the current shareprice.

Agree with others I think a shareprice of double this is quite reasonable for now, although continued execution over a 2-3 year period could see far greater windfall gains. Minimal risk at these prices.

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Hmmm .....ASH is up 200% since the April all time low .
Amongst other things ;
One fund has exited AEF (could be forced by third party action ie the lawsuit being unaccptable amongst their guidelines and not their FA of the bounce) nevertheless another fundie stepped in to a rising price .
Operational cash flow + with increasing revenues indicated & anticipated in CFO's presentation, increasing free cash
So got my interest now ......but what about the statement of claim . From what I have read briefly it appears to be another 'me to' claim through some ambulance chasers. Not saying it has no merit and acknowledge investors have lost money with falling share price but this is the stock market and all companies SPs will go up & down, which are the rules of this game. Has any quantum been mentioned or how will their Professional / Management insurance polices respond?

ASH Price at posting: 18.0¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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