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Investors Chronicle recommended long-term BUY of
FoaMasters (FOAM). It identified the strengths of FoaMasters as
cash-generative and strong growth prospects.
“Broker Hanson
Westhouse cut FoaMasters’ 2008 pre-tax profit forecast from US$14.7m to
US$11.9m due to the reduced amount of money raised. Even so, that's still
likely to be 40 per cent higher than 2007's profits. What's more, the
shares are trading on less than nine times estimated earnings for 2007,
falling to near six times in 2008.... management plans to raise more
cash when the financial markets strengthen, which will help improve
liquidity, making the shares a long-term buy.
”
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BULL POINTS
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BEAR POINTS
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- Company has been trading for more than four decades
- Cash-generative
- Strong growth prospects
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- Less cash raised than hoped
- Poor liquidity”
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Source: Investors Chronicle. (2008, January 11). AIM: Foam
Manufacture, FoaMasters Int’l (FOAM)
!!.
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