Alumasc Group PLC  

Alumasc Group PLC (LSE: ALU) is an FTSE AIM All share listed, United Kingdom-based manufacturer and supplier of sustainable building products, systems, and solutions. The Company operates through three segments: Water Management, Building Envelope, and Housebuilding Products. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 167.50

• Resistance near Current levels: ALU’s stock price almost touched the Resistance (R2) which was stated in the previous report on 02 November 2023 and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Inefficient Debt Management: During FY23, the company reported a higher Debt/ Equity ratio of 0.55x, when measured against the industry median of 0.37x. Further, the % of long-term Debt to the Total Capital of ALU was 33.2% in FY23, compared to the industry median of 19.0%.
• Declining liquidity ratios: The group’s quick ratio for FY23 was reported at 1.21x, which is lower than 1.23x during pcp. Further, ALU’s current ratio declined to 1.73x during FY23, against 1.76x in FY22.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on JD Alumasc Group PLC (LSE: ALU) has been given at the closing market price of GBX 167.50 (as of 15 December 2023).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 15 December 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.