Sims Group Limited

By Brad Newcombe · 12 Sep 2007

By Brad Newcombe ·
12 Sep 2007

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Sims Limited - SGM

Current price

$11.72 at 15:20 (19 April 2024)

Price at review

$30.15 at (12 September 2007)

Business Risk

Medium-High

Share Price Risk

Very High

All Prices are in AUD ($)

Sims Group recently reported a 29% increase in net profit to $255m for the year. Due to an increase in the number of shares on issue, earnings per share only rose 17% to $2.04. Still, it was a good result with a strong performance from the company’s North American business.

The stock is far from cheap however. While its historic PER of 14.8 is about average for an industrial company, don’t forget Sims is a cyclical business riding a commodity price boom. It isn’t a high quality business and, while a doubling in the share price since our last review on 15 Feb 06 (Sell – $14.50) is making us look foolish, we’re sticking to our guns. SELL.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.

Sims Group Limited

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Sims Group Limited

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