ASX:EHL

Stock Analysis Report

Executive Summary

Emeco Holdings Limited provides heavy earthmoving equipment solutions to mining companies and contractors in Australia.

Snowflake

Fundamentals

High growth potential and good value.


Similar Companies

Share Price & News

How has Emeco Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.2%

EHL

0.5%

AU Trade Distributors

0.7%

AU Market


1 Year Return

-43.3%

EHL

-10.5%

AU Trade Distributors

11.0%

AU Market

Return vs Industry: EHL underperformed the Australian Trade Distributors industry which returned -10.5% over the past year.

Return vs Market: EHL underperformed the Australian Market which returned 11% over the past year.


Shareholder returns

EHLIndustryMarket
7 Day3.2%0.5%0.7%
30 Day-3.7%-3.7%-0.2%
90 Day-11.1%-1.8%-0.1%
1 Year-43.3%-43.3%-8.4%-10.5%17.4%11.0%
3 Year187.6%179.3%60.1%44.8%36.3%18.0%
5 Year0.7%-2.3%111.0%78.3%51.4%17.3%

Price Volatility Vs. Market

How volatile is Emeco Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Emeco Holdings undervalued compared to its fair value and its price relative to the market?

25.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: EHL (A$1.96) is trading below our estimate of fair value (A$2.62)

Significantly Undervalued: EHL is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: EHL is good value based on its PE Ratio (17.5x) compared to the Trade Distributors industry average (18.4x).

PE vs Market: EHL is good value based on its PE Ratio (17.5x) compared to the Australian market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: EHL is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: EHL is overvalued based on its PB Ratio (3x) compared to the AU Trade Distributors industry average (1x).


Next Steps

Future Growth

How is Emeco Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

23.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EHL's forecast earnings growth (23.7% per year) is above the savings rate (2.3%).

Earnings vs Market: EHL's earnings (23.7% per year) are forecast to grow faster than the Australian market (10.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: EHL's revenue (5.7% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: EHL's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: EHL's Return on Equity is forecast to be high in 3 years time (21.8%)


Next Steps

Past Performance

How has Emeco Holdings performed over the past 5 years?

36.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: EHL has become profitable over the past 5 years, growing earnings by 36.1% per year.

Accelerating Growth: EHL's earnings growth over the past year (533%) exceeds its 5-year average (36.1% per year).

Earnings vs Industry: EHL earnings growth over the past year (533%) exceeded the Trade Distributors industry -42.9%.


Return on Equity

High ROE: EHL's Return on Equity (17%) is considered low.


Return on Assets

ROA vs Industry: EHL has a higher Return on Assets than the Trade Distributors industry average last year.


Return on Capital Employed

ROCE Improving: EHL's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Emeco Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: EHL's short term assets (A$137.4M) exceeds its short term liabilities (A$106.3M)

Long Term Liabilities: EHL's short term assets (137.4M) do not cover its long term liabilities (464.3M)


Debt to Equity History and Analysis

Debt Level: EHL's debt to equity ratio (231%) is considered high

Reducing Debt: EHL's debt to equity ratio has increased from 107.6% to 231% over the past 5 years.

Debt Coverage: EHL's debt is well covered by operating cash flow (37%).

Interest Coverage: EHL's interest payments on its debt are not well covered by EBIT (2.1x coverage).


Balance Sheet

Inventory Level: EHL has a high level of physical assets or inventory.

Debt Coverage by Assets: EHL's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Emeco Holdings's current dividend yield, its reliability and sustainability?

2.05%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%2.5%markettop25%5.6%industryaverage2.2%forecastin3Years2.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate EHL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate EHL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if EHL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EHL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: EHL is not paying a notable dividend for .


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EHL's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Emeco Holdings's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Ian Testrow (49yo)

4.2yrs

Tenure

AU$11,439,633

Compensation

Mr. Ian M. Testrow, BEng (Civil), MBA has been the Chief Executive Officer, Managing Director and Executive Director at Emeco Pty Limited since August 2015 and as its Chief Operating Officer since 2014. Pr ...


CEO Compensation Analysis

Compensation vs. Market: Ian's total compensation ($USD7.74M) is about average for companies of similar size in the Australian market ($USD727.06K).

Compensation vs Earnings: Ian's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.7yrs

Average Tenure

Experienced Management: EHL's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

2.5yrs

Average Tenure

60yo

Average Age

Experienced Board: EHL's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$9,244,77307 Oct 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares5,009,797
Max PriceAU$2.13
SellAU$14,980,15727 Aug 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares7,509,733
Max PriceAU$2.20
SellAU$9,184,11514 Jun 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares2,638,323.1
Max PriceAU$24.99
BuyAU$10,850,15514 Jun 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares5,114,536
Max PriceAU$2.50
SellAU$988,40004 Apr 19
Eley Griffiths Group Pty Limited
EntityCompany
Shares500,000
Max PriceAU$1.98
SellAU$11,409,96306 Dec 18
Paradice Investment Management Pty Ltd.
EntityCompany
Shares8,914,965
Max PriceAU$1.28
BuyAU$39,96328 Nov 18
Ian Testrow
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares15,985
Max PriceAU$2.50

Ownership Breakdown


Management Team

  • Ian Testrow (49yo)

    MD, CEO & Executive Director

    • Tenure: 4.2yrs
    • Compensation: AU$11.44m
  • Thao Pham

    Chief Strategy Officer

    • Tenure: 2.4yrs
    • Compensation: AU$1.96m
  • Penny Young

    Company Secretary & General Counsel

    • Tenure: 2.3yrs
  • Justine Lea

    Chief Financial Officer

    • Tenure: 3yrs
    • Compensation: AU$1.19m

Board Members

  • Peter Frank (72yo)

    Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: AU$99.50k
  • Peter Richards (60yo)

    Independent Chairman of the Board

    • Tenure: 3.8yrs
    • Compensation: AU$171.97k
  • Ian Testrow (49yo)

    MD, CEO & Executive Director

    • Tenure: 4.2yrs
    • Compensation: AU$11.44m
  • Keith Skinner (66yo)

    Independent Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: AU$112.61k
  • Darren Yeates (58yo)

    Independent Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: AU$109.33k

Company Information

Emeco Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Emeco Holdings Limited
  • Ticker: EHL
  • Exchange: ASX
  • Founded: 1972
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: AU$591.284m
  • Shares outstanding: 306.36m
  • Website: https://www.emecogroup.com

Number of Employees


Location

  • Emeco Holdings Limited
  • 71 Walters Drive
  • Level 3
  • Perth
  • Western Australia
  • 6017
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EHLASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2006
E3ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2006
EOHD.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2006
EHLCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2006

Biography

Emeco Holdings Limited provides heavy earthmoving equipment solutions to mining companies and contractors in Australia. The company rents trucks, excavators, dozers, loaders, and graders. It is also involv ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 10:33
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.