Brilliant post, mate. That was a really good read.
I do reasonably well with the ASX100 stocks which represent the bulk of my portfolio. I like to dabble in industrial small caps which pay dividends and have a growth pathway. However, unfortunately for me, virtually all of them are in the red, and have become long-term, turn around stories where I'm nursing a paper loss! Maybe there is a lesson here for me to stick with larger cap companies
You're correct -- there is no way a $1.00 share price can be justified, and the price fall was completely reasonable. I fully agree that only a decent FY26 can re-rate the share price much higher. Investors are (understandably) not prepared to wait and have fled in droves.
There is so much to like -- From memory, QLD has doubled its revenue since acquisition in 2022. I have never been to Queensland; the place must be going gangbusters. Two other industrial small caps I have a small position in get an outsized part of their revenue from that state. WA is already looking like an excellent purchase, with LaserBond services to commence operations at Gateway very soon to add more upside. And the improvement from 40-51% ownership is surely a certainty. It will be good to have the WA revenue as officially our revenue once we have operational control. LBL Revenue has roughly doubled in the past three-or-so years, and we now have a presence in the five mainland states and more trained staff and salespeople than ever before. If they remain busy and productive, we should have a good next few years. Arguably we are set-up nicely for growth.
I note on the PAC Partners Initiating Coverage report (excellent work -- the analyst has gone far above and beyond the usual reports, and has really attempted to deeply understand LaserBond, its services and competitors. It's not the usual, lazy, plug-and-play report with updated financial figures) we're the only surface engineering company with a national presence, and one of a rare few with its own, internal R&D team and valuable IP.
Not to like.... the buy/sell orders have looked *horrible* in the past few days. Few buyers, and sellers galore -- outnumbering them almost 10:1 when I looked on Tuesday. The Queensland site expansion will cost money or dilution or dividend cuts, as will the US move (especially if we purchase an existing business). And I assume we'll take the extra 11% of Gateway in two years' time. The optimistic analysts' reports
revenue and
EPS figures out to 2028 are worthless. In addition, we need to hope the
Products division has a better 2H than 1H. I dislike it when companies need to perform significantly better in 2H to achieve their guidance. There's the risk of so much revenue coming from two main customers. And according to PAC Partners "a major customer changingtheir foundry from Australia to the sub-continent" which can't be good for us. No directors' purchases. I would like to see a director or two buying a large parcel to add confidence in the next week or so.
Anyway, I took a deep breath and bought a few more yesterday. A small purchase, which I will add to more vigorously if the share price falls towards 30 cents (given the ugly price graph, why wouldn't it?). I cannot see LBL anywhere near going out of business, and the risk v reward equation starts to look tempting. It's brought my average price down from near 68 cents to 61 cents. Nice. Anything close to 30 cents and, providing nothing untoward is announced, I'll hopefully average-down to < 50 cents.
Funny how the market is unexpectedly down today after last night's strong session in the US and Europe. And LBL is ex-dividend. And as I type this, the LBL share price is up 1.97%. Unbelievable. I was a little apprehensive typing "LBL" into HotCopper for fear of what I might see
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