IDP group worth revisiting ?This is one of the stocks which had a regular increase of its share price, but had a major correction recently (- 34 % vs its peak valuation).
Worth revisiting for different reasons :
- major beneficiary of electrification (for ex. 32 % of sales with ABB group),
- already large profitability (EBITDA margin of 13.9 %),
- high level of free cash flow (excluding working capital change, FY 24 free cash flow yield of 5.8 % and probably more around 7 % if we annualise their recent major acquisition, CMI).
After the decrease of the share price following a cautious earning guidance for H1 25 (- 8 % for EBITDA), 2 major shareholders have largely increased their holding : MA fin (from 5.5 % to 8.54 %) and 1 director (Mr Yoosuff who just bought 1 million shares on the market for an average price of 3.78 $).
@neotericAnything new for you in this story ?
Good that you mentioned before that CMI was "cyclical in nature". It may explain why its earnings decreased in FY 24.
IDP looks quite cheap to me now with a PE 24 of 16.4 x (which obviously did not include all the impact of CMI, consolidated only on 7 months).
The stock has returned to its level pre CMI acquisition (which had an earning accretion impact of 30 %), so it looks quite interesting (unless it was grossly overvalued pre CMI acquisition).
