Emeco’s Share Price gets ‘Rising Star’ Label following Good News Week

Emeco Holdings Ltd [ASX:EHL] has been a rising star on the ASX recently, especially after releasing a predicted 40% year-on-year EBITDA growth for this year, improved margins and a 20% return on capital last week.

Following that news, their share price shot up by 14%. On Friday, they announced that existing holder, Paradice Investment Management Pty Ltd, had increased their position within the company by 9.047% — a purchase of over five million shares.

Granted, this news doesn’t directly relate to their share price, but the confidence of such a large fund manager is sure to rouse individual investors to do the same.

Today, Emeco has increased again by 7.8% — bringing their shares to $2.14 apiece.

Free report: Aussie stock picker, Sam Volkering (with gains as high as 1,431% in the last 18 months) reveals what he believes are his next four big potential winners.

Why is Emeco attractive to investors?

Being one of the best performers on the ASX today, it’s definitely been drawing eyes.

Emeco Holdings is a leading provider in equipment leasing to earthmovers, and has a strong demand for its services.

As was revealed in their FY19 Guidance, Operating Update and Investor Presentation last Wednesday, they have a lot to celebrate — an Operating EBITDA ranging between $211 and $213 million for this year, strong market conditions (resulting in more demand for their hiring services), strong cash flow, and capital expenditure due to generate $25 million EBITDA next year, due to the recent purchase of high-utilisation assets.

This, along with the buy up from Paradice on Friday following a stabilisation of the share price, points towards very promising news for the miner.

Should you be investing in Emeco?

This news, paired with an attractive buy price, is a good sign for potential investors. However, whether they can continue to deliver such a growth rate is another issue altogether, and worth watching closely.

We recommend you do your own extensive research before placing your money in Emeco.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

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