Shares in automotive products and services company AMA Group (AMA) recorded its best one-day jump in over three months this morning after it announced it was buying Custom Alloy.
AMA will pay $4.9 million plus inventory capped at $1 million for the private bullbar maker, which is around 3.4 times Custom Alloy’s annual earnings before interest and tax (EBIT).
The stock jumped 7.3%, or 2.5 cents, to 37 cents this morning but at least one broker believes there is plenty more upside to AMA.
Canaccord Genuity believes the acquisition is highly complementary with AMA’s existing business and the broker has upgraded its share price target to 49 cents from 44 cents a share and reiterated its “buy” recommendation on the group.
AMA had a good year with the stock up 37% in the past 12-months. The group is part of the Uncapped 100.