Extract:
Recommend ALU as Buy. Our valuation of Altium is c.+A$11.40 per share. We value the core ALU operations at c.A$6.00 (20x PER 2017E) & Dassault OEM agreement at +A$5.40 (in our opinion the latter is very conservative, particularly as ALU are looking to integrate with Dassault’s high-end product, so possibly +A$20.00 valuation). · Price Target +$12.00. Dassault is a quality software company, on a global scale. The uplift in ALU’s earnings over the next 5-years is material (not just Dassault), leading to a share price above A$12, in our opinion
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A couple of observation(s):
ALT are upping there M&A team to help with growth by acquisition's which is great to see. The Dassault partnership is already starting to show material worth, the balance sheet continues to look healthy with revenues and NPAT continuing to grow. If you are a long termer, what's not to like...
ALU Price at posting:
$9.31 Sentiment: Buy Disclosure: Held
