Small-Cap

One Integrated Mobility Solutions Provider Touched its 52-Week High – SGF

February 23, 2024 | Team Kalkine
One Integrated Mobility Solutions Provider Touched its 52-Week High – SGF

SGF:ASX
Investment Type
Small-Cap
Risk Level
Action
Rec. Price (AU$)

This report is an updated version of the report published on the 23 February 2024 at 5:00 PM AEDT. 

SG Fleet Group Limited (ASX: SGF)

SG Fleet Group Limited (ASX: SGF) is a provider of integrated mobility solutions. With presence across the UK, Australia and New Zealand, the ASX-listed company is engaged in delivering fleet management, vehicle leasing, and salary packaging services. SGF manages more than 250,000 vehicles and employs over 1,100 staff.

Recommendation Rationale – Sell at AUD 2.84

  • Profit Booking: SGF’s share is hovering close to the Resistance 2 level recommended on 15 February 2024. Therefore, it is offering a profit booking opportunity.
  • Overvalued Multiples: On a forward 12-month basis – key valuation multiples (EV/Sales, and EV/EBITDA) are higher than the median of the Industrials sector.
  • Financial Highlights: During H1 FY24, Revenue and Net Profit After Tax increased by 4% and 8.5%, respectively.
  • Increased Cost: During H1 FY24, labour market conditions and integration related costs elevated operating expenses.

SGF Daily Chart

Daily Technical Chart; Source: REFINITIV 

The stock is trading near the resistance 2 level, hence representing a profit booking opportunity. Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the closing market price of AUD 2.840, as of 23 February 2024.

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 23 February 2024. 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. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.



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