Michael Gable

ALU’s strong double-digit consensus EPS growth forecasts for FY16, FY17 and FY18 is underpinned by continued growth in Altium’s key product – Altium Designer – as well as growth in new products. The stock's trading on a 1-year forward P/E of 24.8x, which is not considered overly expensive for a Company with such strong fundamentals. We note that ASX-listed peer company Technology One (TNE) trades on a higher multiple of 33.7x, but has a less EPS growth profile than ALU. It may be prudent for investors looking for an entry point to wait for the Company’s results, noting that any retracement in the share price is seen as an entry opportunity. ALU has been in an uptrend for the last few years, most recently bouncing off support a few weeks ago near $4.40. Since then it has managed to rally over a dollar, gapping up last week above resistance. As long as any weakness is contained within last week's trading range, that is, it stays above $5, then ALU should continue to trend higher from this point. Full report (VIEW LINK)


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