Aecon Group, Inc. (ARE) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

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Why is Aecon Group, Inc. ?

Poor Management Efficiency with a low ROE of 6.90%

The company has been able to generate a Return on Equity (avg) of 6.90% signifying low profitability per unit of shareholders funds

Poor long term growth as Operating profit has grown by an annual rate -1.85% of over the last 5 years

The company has declared Negative results for the last 3 consecutive quarters

DEBT-EQUITY RATIO (HY) Highest at 24.43 %
INTEREST(Q) Highest at CAD 18.29 MM

With ROE of 1.80%, it has a fair valuation with a 1.72 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 12.24%, its profits have risen by 318.1% ; the PEG ratio of the company is 0.3

Majority shareholders : FIIs

Underperformed the market in the last 1 year

The stock has generated a return of 12.24% in the last 1 year, much lower than market (S&P/TSX 60) returns of 22.54%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Aecon Group, Inc. should be less than 10%
Overall Portfolio exposure to Construction should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Construction)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Aecon Group, Inc. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Aecon Group, Inc.

135.1%

1.50

39.63%

S&P/TSX 60

21.87%

1.54

14.62%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

8.32%

EBIT Growth (5y)

-21.48%

EBIT to Interest (avg)

0.83

Debt to EBITDA (avg)

0.94

Net Debt to Equity (avg)

0.12

Sales to Capital Employed (avg)

3.37

Tax Ratio

20.08%

Dividend Payout Ratio

316.40%

Pledged Shares

Institutional Holding

0.08%

ROCE (avg)

5.54%

ROE (avg)

6.90%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

NA (Loss Making)

Industry P/E

Price to Book Value

2.96

EV to EBIT

71.59

EV to EBITDA

18.80

EV to Capital Employed

2.99

EV to Sales

0.50

PEG Ratio

Dividend Yield

ROCE (Latest)

4.18%

ROE (Latest)

-0.38%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Bullish

OBV

No Trend

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

10What is working for the Company

NET PROFIT(HY)

Higher at CAD 14.96 MM

INVENTORY TURNOVER RATIO(HY)

Highest at 194.18 times

NET SALES(Q)

Highest at CAD 1,530.22 MM

-13What is not working for the Company

INTEREST(HY)

At CAD 36.32 MM has Grown at 64.81%

PRE-TAX PROFIT(Q)

At CAD 31.43 MM has Fallen at -55.09%

NET PROFIT(Q)

At CAD 27.04 MM has Fallen at -50.9%

RAW MATERIAL COST(Y)

Grown by 33.48% (YoY

Here's what is working for Aecon Group, Inc.

Net Sales

Highest at CAD 1,530.22 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Inventory Turnover Ratio

Highest at 194.18 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Here's what is not working for Aecon Group, Inc.

Interest

At CAD 36.32 MM has Grown at 64.81%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Pre-Tax Profit

At CAD 31.43 MM has Fallen at -55.09%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very negative

Pre-Tax Profit (CAD MM)

Net Profit

At CAD 27.04 MM has Fallen at -50.9%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (CAD MM)

Raw Material Cost

Grown by 33.48% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales