MENU

How this conglomerate has quietly doubled its share price in a year

Over the last year, stocks such as Kogan.com Ltd (ASX: KGN)a2 Milk Company Ltd (Australia) (ASX: A2M), Afterpay Touch Group Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) have all gone up over 170%.

These companies have performed very well as investors get more excited over the technologies supporting them and the growth in their businesses.

One stock that has been a surprise top performer, is Seven Group Holdings Ltd (ASX: SVW), the conglomerate which owns investments in industrial services and media. In industrial services, it owns WesTrac Group which is the sole authorised Caterpillar dealer in Western Australia, New South Wales and the Australian Capital Territory in Australia. Seven Group Holdings also owns AllightSykes, a supplier of lighting towers, generators and pumps, and Coates Hire.

In media, Seven Group Holdings has a significant shareholding in Seven West Media, Australia’s largest multi-platform media company. These investments in leading companies expose Seven Group to booms in key Australian industries such as mining and construction.

Here are a few reasons why I think the Seven Group Holdings share price has done well:

  • Acquisition of Coates Hire. Seven Group Holdings is now the 100% owner of Coates Hire, Australia’s largest equipment hire business. The acquisition was completed at an implied 6.5 times Enterprise Value to FY 2017 EBITDA and is accretive to the Group’s earnings per share and free cash flow.
  • The sale of WesTrac China for $540m strengthens the company’s balance sheet, frees up capital for new transactions and management concluded that it optimizes the value of the business at the right time in the cycle.
  • The company experienced strong earnings growth which was at the upper end of management’s guidance.

Going forward, I think there is still some long term upside to Seven Group Holdings. The company’s investment in Beach Energy Ltd (ASX: BPT) also gives them exposure to oil which has been rising towards the US$70 mark.

Bill Gates Says This Could Be Worth “10 Microsofts”

If You Missed Investing In Microsoft in 1996 – Read This

I can’t believe so many investors haven’t heard about something Microsoft founder Bill Gates told a group of college students in 2004.

This could be your chance to get in on the ground floor!

Click here to discover more!

Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia owns shares of A2 Milk, AFTERPAY T FPO, and WiseTech Global. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!