Ambertech Limited

ASX:AMO

Ambertech Limited

ASX:AMO
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$0.150 (-6.3%)
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Forum Topics AMO AMO Ambertech general discussion
Vandelay
Added 3 years ago

My impeccable timing to sell out of this stock really taught me a lesson about being impatient. What does Buffett say "the stock market is a device for transferring money from the impatient to the patient". 

Haha! I got what i deserved. 

15
Dominator
Added 3 years ago

Very unlucky Vandelay.

I have no idea why the price jumped today wasn't expecting it so soon. Waiting to see if tomorrow is a big sell off given the price action today. I'm finding it very Interesting to watch  the mechanics of the market here. 

8
Rick
Added 3 years ago

Hi Vandalay, I just had a quick look at the information on SWS. The metrics match your take. At first glance the ROCE last year was 21.6%, future ROE 40%, Debt/equity of 29.2%. Non-executive Director Santo Carlini owns over 36% of the business. Non-executive chairman, Peter Wallace, bought 100,000 shares @ 23c on 26 Feb. it's not covered by any analysts on SWS. 

14
Vandelay
Added 3 years ago

Intelligent Strawpeople. Please help.

I came across this company and just looking at the numbers, i feel like i must be missing something. Its trading at 27c. So on half year earnings its a PE of 5.7x if they hit the same earnings for the second half thats a PE of 2.8x.Tailing twelve months eps is 0.11 so its on a ttm PE 2.5x ....How is it possibly that cheap? Also paid 1.5c divided for the half year if they do the same thatd be 3c dividend for the full year which is like a 12% yield.

Has anyone looked into this in depth and advise whatever i am completely overlooking.

15
shadow
Added 3 years ago

I had never heard of this company until it popped up in my feed just now. Taking a quick squizz at the report I was pleasantly surprised at the list of clientele (Department of Defense, ABC, JB Hifi, etc).

I assume just like any other government contract or large contract it would go through a tender bidding process. Looking at their profit margin (circa 9%) I question if the margin is being squeezed from the tendering process? And what moat does Ambertech have - surely Ambertech isn't the only high technology audio-visual (AV) / communications suppliers in Australia?

Thanks for bringing this into my attention...this will be an interesting company to do further research into.

14
Dominator
Added 3 years ago

Hi Vandelay,

When I bought in to AMO I had the exact same feeling. What on earth am I overlooking? 

This isn't a high quality business thats going to multi-bag but is it worth more than a PE of 5-6? I think so. At those rates you are getting a 16-20% earnings yield. My thesis relies on AMO only needing to maintain the previous two halves of profitability (approximately $3 mil). Reading my thesis again, maybe I overrated the potential P/E of 15, maybe 10 is more realistic? Based on an ongoing annual NPAT of $3 mil that gives a MC of $30 mil.  Almost 50% more than todays closing price.

While management doesn't appear to be anything special, it is their baby. They have serious skin in the game and they are going to want some return for their hard work getting the business to profitability. I'm happy to jump on in the last minute to share the returns with them even though I didn't do any of the work... 

14
Dominator
Added 3 years ago

Forgot to add, when looking at the numbers I take out Jobkeeper so that may be a reason you get a P/E of 2.8x and I quote around 5-6.

9
Vandelay
Added 3 years ago

Thanks all. Seems like the consensus, which i agree with, is the low quality business is keeping the multiple low (for now). The market must be skeptical that the profitability the company showed in the first half wont continue. I think the risk vs reward is in investors favor with this currently, possibly the downside risk limited to be in line with NTA at 14c per share. 

9