Smallcap, auto-parts retailer, Bapcor, has been range-bound for most of the last twelve months, but there are some thoughts that today’s result could trigger the next leg up. Here are four views from Livewire contributors, all of them positive.
Dean Fergie, Cyan IM
In a recent Buy Hold Sell, Dean Fergie from Cyan told us: "It's a buy. It's an incredibly well-managed business, the retail footprint is quite defensive, and it has upside through the Hellaby acquisition". (VIEW LINK)
Steve Black, Pengana
In terms of a stock that’s been recently harshly dealt with, I will single out Bapcor. The company trades on only 16 times 2018 earnings (the lowest it's ever traded on), its earnings are economically resilient, exceptionally well managed, and still has a long runway for store roll out across its many banner brands: (VIEW LINK)
We forecast 42% EPS growth in FY17, followed by a further 23% in FY18. This growth business with defensive characteristics offers (in our view) an attractive investment opportunity. We see three upcoming catalysts: 1) a strong FY17 result; 2) articulation of potential future efficiencies from the warehouse optimisation process which has been running quietly in the background; and 3) the sale of non-core assets: (VIEW LINK)
James Gerrish, Market Matters / Shaw and Partners
BAP is a Victorian-based company which retails automotive parts, it has a market cap. of 1,429m. The stock is down under 5% for the year but being involved in retail may lead to it being a candidate for tax loss selling. We will consider buying BAP under $4.50 in the next 1-2 weeks, over 12% lower (as of 12th June 2017): (VIEW LINK)
What other brokers are saying
FNArena reports that 4 brokers are currently covering the stock, 3 of which are Buys, and 1 Neutral, with a mean forecast EPS of 23.8 cents. You can access the Reporting Season Monitor here.
I'm bullish too, even though this reporting season seems to under-reward even good results.