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KALIN®

Metcash Limited

20 November 2023

MTS:ASX
Investment Type
Mid - Cap
Risk Level
Medium
Action
Buy
Rec. Price (AU$)
3.68

1.1: Company Overview: Metcash Limited (ASX: MTS) is an Australian wholesale distribution and marketing company operating through the food, grocery, liquor, and hardware segments. The company serves a growing network of independent retailers in Australia and New Zealand. Kalkine’s Investor Report covers the Investment Highlights, Management Insights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.   

1.2: The Key Positives, Negatives, Investment Highlights, and Risks:

1.3: Top 10 Shareholders: The top 10 shareholders together form ~46.69% of the total shareholding. Perpetual Investment Management Limited and Allan Gray Australia Pty Ltd are holding maximum stakes in the company at ~8.70% and ~7.01%, respectively.

1.4: Key Metrics: MTS registered a fixed asset turnover ratio of 18.07x in FY23 compared with 3.83x of industry median. Below is captured the metrics showing the trend of net margin and current ratio since FY19:

2.1: Recent Business Updates:

2.2: Financial Insights:

2.3: Historical Financial Trend:

4.1: Price Performance and Technical Summary

The stock price has gone down by ~0.54% in the last one month and over the last 6 months, stock prices went up by ~0.27%. The stock has a 52-week low and 52-week high of AUD 3.450 and AUD 4.350, respectively, and is currently trading below the mid-range of the 52-week-high-low levels. MTS was last covered in a report dated ‘8 September 2023’.

4.2: Fundamental Valuation

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 20 November 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.  

Note 4: Dividend Yield may vary as per the stock price movement.  

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.


Disclaimer-

This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

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