This Week’s Hot Stock Is Valmec (VMX)
The Golden Hot Star stock of the week is awarded to Valmec Limited (VMX). The half year results recently reported were strong on revenue and earnings growth. In particular, Revenue was up 66% on HY17 to $49.7 million, EBITDA increased by $2.3 million or 209% on HY17 to $3.4 million, and Net Profit before Tax increased by $2.1 million.
There was a significant ramp-up in construction activity across all sectors, and they experienced industry leading safety performance currently over 1.6 million hours LTI free, along with a stronger balance sheet supported by a Jan 2018 equity raise.
Plus, add to the fact that we get a chart that looks like it’s ready to have an aggressive run in a sector that is also popular with investors.
Why we like it:
On the fundamentals it’s quite simply as the results clearly show. VMX is poised for strong growth on the back of a growing order book and improving margins in a market that’s on the up.
The company recently raised $5.1 million and is well-funded for growth.
And on the technicals…VMX has not broken its short term (20x day) moving average since August 2017. While not a super-aggressive trend, it continues to elegantly swing its way to higher highs.
As the momentum traders would say “why wouldn’t you buy that?