company report

Atlas Group Holdings Limited (AHS) Recommendation Spec Buy Buy Add Hold Sell
Risk Rating Low Medium High





Sector Steel Specialty
Index S&P/ASX 300
Market Capitalisation 128.1 m


Strategy
First Recommended 07/01/2005
Share Price * $1.325
12 Month Price Target $1.80
Suggested Stop Loss $1.10


* at the time of writing the report


wise-owl Checklist

Strong management team with a focus on organic growth and improvement in efficiencies
On track for EBIT of $26.5m for FY05 compared to $19.m for FY04
Stock currently trading at a low PE Ratio of 8.41 and an attractive dividend yield.
Strong institutional register including Investors Mutual at 4.7% and recently Renaissance Smaller Companies (5.42%).
Strong uptrend that has recently broken out of a flag formation.

Summary
This section aims to give you a snapshot of the recommendation in a very clear and concise fashion and more importantly leaving you with a strategy to act upon immediately.




Background

Atlas Group Holdings Ltd (AHS) is focused on the processing and distribution of specialty steels in Australia and New Zealand. First established in 1939, AHS trades under the brands of Atlas Speciality Metals and Bisalloy Steels.





Investment Summary

AHS was first recommended to members on the 7th of January, 2005 at $1.29 as a long term buy for growth and value. Since then AHS has paid a 3.9c fully franked dividend on the 4th of May, 2005. Whilst the share price has underperformed the broader market in the last six months, AHS has been able to demonstrate that the impact of the downturn in the housing maket has not had any substantial impact to the bottom line. In fact, half year results to December 2004, confirm the value proposition that AHS offers investors. Trading at a low PE and high dividend yield, AHS is on track for long term growth and has a strong balance sheet to match. AHS remains 'Australia's largest distributor of speciality metals' and is a smart player in a niche market. For this reason, it is recommended that members 'add' to their existing holdings, whilst those members with no exposure, to 'buy' at current prices.