TSX:VNP - Post Discussion
Post by
midard on Feb 25, 2021 5:19pm
Article journal les affaires
https://www.lesaffaires.com/bourse/analyses-de-titres/a-surveiller-wsp-5n-plus-et-dye-et-durham/623252/2 translate by Google:
5N Plus (VNP, $ 4.53): the technological metals producer ready to acquire 5N Plus’s recovery plan is fairly advanced and its balance sheet strengthened enough to take the next step in its strategic transformation: accelerate its growth and expand its potential market. The specialty materials maker is actively seeking acquisition opportunities in the area of high value, advanced materials. "We applaud the managers for wanting to refocus on advanced materials that offer good growth prospects, attractive margins and larger potential markets," writes Frdric Tremblay, of Desjardins Capital Markets. 5N Plus already manufactures high performance spherical powders, innovative substrates, materials for microarrays and medical imaging as well as ingredients for antiobiotics. At the same time, the company plans to do away with some traditional less profitable activities. Industrial materials are more prone to fluctuations in the price of base metals. "This development should help raise the stock's valuation," said the analyst. Investors appreciated the potential of this new step. Its stock gained more than 5% on February 24. It must be said that the company also unveiled a solid fourth quarter. Revenues of US $ 46.2 million exceeded Desjardins' forecasts by 16%. Operating profit jumped 45% to US $ 6.5 million, slightly better than the analyst expected. The operating margin also advanced from 10 to 14.2%. The excess cash flow of US $ 17.7 million more than tripled from a year earlier. These flows have cleaned up the balance sheet. The ratio that compares debt to operating profit fell from 1.6 times at the end of 2019 to 0.4 times, specifies Frdric Tremblay. Executives would be comfortable increasing the ratio up to 3 times to make acquisitions. The proceeds from the eventual sale of industrial metals would add to the company's ammunition. Frdric Tremblay increases his target price from $ 4.50 to $ 5.50 from 8 to 10 times operating profit. He also reiterates his recommendation to buy.
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