Pinned straw:
Tuesday Trades at $4.47 will this price give way to the Offer Price of $3.93 (price normally will fall to the Offer price)
Solvetheriddle
for anyone interested in this stock, i do recommend the attached broker initiation. i have met Adam a few times and he is quite even-handed and he does the work.
i knew nothing about IPG before reading it, a lot of detail, well worth the effort if in IPG, it is freed on the ASX site
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.taylorcollison.com.au/wp-content/uploads/2023/12/IPD-Group-Initiating-Coverage-TC-Research.pdf?utm_medium=email&_hsmi=285564264&utm_content=285564264&utm_source=hs_email
mikebrisy
@raymon68 I hope you are right and that the SP comes down to close to the Offer level.
I have recently been looking at $IPG. Even though they only have a couple of years under their belt since listing, they look interesting.
On metrics for distributors they look pretty good, with an % EBITDA Margin of 12.2%, cash generative, and with a 4-yr revenue CAGR of 32% - albeit aided by a few small acquisitions.
My draft thesis for $IPG is that this is a good way to play the AI/Datacentre, EV, energy transition: multiple, long-term tailwinds. As a distributor and supplier of electrical components, they appear well-positioned and focused to benefit from the significant investment in these areas over the coming years. In some of the categories, distribution agreements mean that competition in Australia isn't as fierce as in some other categories (more work needed to test that.)
They appear to have established a good distribution engine - their GMROI (gross margin return on inventory) is 205%, which is almost as good as $SGI's,...both significantly better then several other larger ASX distributors. (internationally, benchmarks for a good GMROI in industrial and electrical sectors is 200%-300%)
The Board and Employees own a decent chunk of the equity as well.
I haven't purchased to date, because at a forward p/e of 20 it isn't exactly cheap , although I haven't yet done my own valuation of the company. They only recently came onto my radar screen, but appear to be well-managed.
If the S/P comes back to below $4.00, then it definitely looks interesting. So, will have to monitor this one closely.
@Strawman have we ever asked CEO Michael Sainsbury if he'd be willing to talk to us? If not, it would be good to get him along in the New Year.
Disc: Not held but considering it
edgescape
I initially thought this would go lower too after seeing Bell Potter as underwriter.
I don't think it will go lower. Heavily oversubscribed on the insto part so the lead manager did not have to buy any stock. Not to mention there are some new holders who got a discount which is not fair in my opinion. And the retail component is small. I think even if there is a shortfall on the retail placement, Bell Potter should have no trouble finding buyers - my observation only given what happened from the insto placement.
And more importantly, an increase in forecast EPS and guidance after acquisition. So hard earned dollars go to increased cashflow and guidance as opposed to CAPEX where timing of cashflows is uncertain with risk.
Could also explain why the price has held firm.
But the business of being a distributor is boring and not very amazing though...
