A few thoughts i had:
1. H2 should not be better than half 1 seasonally - with the Christmas shutdown, and the Northern Hemisphere winter.
2. Not really any good news from the energy division - revenues up and profits not meeting expectations after the reservoir acquisition - is the acquisition a dud - or extremely poorly timed?
3. Excl energy - only industrial is holding up - the other divisions are under pressure too it seems.
So what multiple would you pay? Are the competitors scaled up as well, and needing scale to keep feeding the equipment? Could the testing capacity now be in oversupply? Smart employees can process many more samples per head with robotics and good systems - so no shortage of analytical people - other than at the the "grey hair" level. I.e. - has the opportunity been lack of capacity in the past, and this is what drove excellent returns, and not anything exceptional that is an attribute of ALQ alone.
Maybe these guys do have a "moat" - but I am not sure what that moat might be - historical returns on equity have definitely been excellent in the past.
Would love some comments. I shorted it around the open (sadly not precisely at the open).
GLTA
ALQ Price at posting:
$6.04 Sentiment: Sell Disclosure: Held
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