In my view, the business has held one of the best structural growth positions on the ASX and will keep that spot, though not as strongly as before. Rising SG rates, a rare and differentiated super offering, and a duopoly in their niche give them a moat that can support double-digit top-line growth for decades.
Dispite this, management’s obsession with adding more staff has dragged down the bottom line and hurt shareholder returns. I don’t know what their excuse would be if asked, but I’m sure that if an activist stepped in at Ethical and made changes, profits could easily double. Why does a "scalable" business keep lifting headcount so quickly?
AEF Price at posting:
$7.33 Sentiment: Hold Disclosure: Held
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