Gamma Communications Plc (GAMA) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Gamma Communications Plc

BT Group Plc

Maintel Holdings Plc

Zegona Communications Plc

Mobile Streams Plc

Bigblu Broadband Plc

Why is Gamma Communications Plc ?

Strong Long Term Fundamental Strength with a 13.51% CAGR growth in Operating Profits

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 65.32
The company has been able to generate a Return on Capital Employed (avg) of 38.54% signifying high profitability per unit of total capital (equity and debt)

The company has declared Positive results for the last 4 consecutive quarters

OPERATING CASH FLOW(Y) Highest at GBP 213 MM
ROCE(HY) Highest at 19.42%
DEBT-EQUITY RATIO (HY) Lowest at -39.03 %

With ROE of 20.14%, it has a expensive valuation with a 2.69 Price to Book Value

Over the past year, while the stock has generated a return of -42.09%, its profits have risen by 27.4% ; the PEG ratio of the company is 0.5

Below par performance in long term as well as near term

Along with generating -42.09% returns in the last 1 year, the stock has also underperformed FTSE 100 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Gamma Communications Plc should be less than 10%
Overall Portfolio exposure to Telecom - Services should be less than 30%

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

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

Is Gamma Communications Plc for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Gamma Communications Plc

-100.0%

-1.32

26.39%

FTSE 100

16.5%

1.23

12.99%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

12.01%

EBIT Growth (5y)

13.51%

EBIT to Interest (avg)

65.32

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.41

Sales to Capital Employed (avg)

1.61

Tax Ratio

26.99%

Dividend Payout Ratio

26.50%

Pledged Shares

Institutional Holding

ROCE (avg)

38.54%

ROE (avg)

20.39%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.69

EV to EBIT

10.20

EV to EBITDA

7.33

EV to Capital Employed

2.58

EV to Sales

1.60

PEG Ratio

0.46

Dividend Yield

0.01%

ROCE (Latest)

25.29%

ROE (Latest)

20.14%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Mildly Bullish

Bearish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bearish

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

Not enough Data to analyse Financial Trend

Here's what is working for Gamma Communications Plc

Operating Cash Flow

Highest at GBP 213 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (GBP MM)

Net Sales

Highest at GBP 296.9 MM and Grown

In each period in the last five periods

MOJO Watch

Near term sales trend is very positive

Net Sales (GBP MM)

Debt-Equity Ratio

Lowest at -39.03 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Debtors Turnover Ratio

Highest at 5.05% and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Dividend per share

Highest at GBP 5.05 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (GBP)

Operating Profit

Highest at GBP 62.5 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (GBP MM)

Pre-Tax Profit

At GBP 47.1 MM has Grown at 68.21%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (GBP MM)

Net Profit

At GBP 34 MM has Grown at 65.05%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is positive

Net Profit (GBP MM)

Cash and Eqv

Highest at GBP 153.7 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -1.51% (YoY)

MOJO Watch

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

Raw Material Cost as a percentage of Sales

Depreciation

Highest at GBP 17.9 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (GBP MM)

Here's what is not working for Gamma Communications Plc

Interest Coverage Ratio

Lowest at 6,250 and Fallen

In each period in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Interest

At GBP 1 MM has Grown at 100%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (GBP MM)