Altitude Group: (ALT.L, AIM All-Share, Market Cap ¬£80m, 107p, 4.0% of JIC Portfolio and 0.0 of JIC Top 10)
As I thought might happen after such a strong run into the results, the share‚Äôs saw some profit-taking.¬†
On doing a little more work on the company this morning, it is making good progress signing new suppliers. Signing new suppliers¬†is key, as Altitude takes a fee for all orders that signed up suppliers take from AIM members, whether it is through the AIM website or not. It is also achieving good growth in new members, up 23%, who are also spending more, up 32%. Usage is also growing rapidly; in April its throughput was running at $2m per week, up from $1m per week in March.
Finncap is sticking to their numbers for 2019 and 2020, which point to earnings per share of 7.3p followed by 15.4p. At 108p, that means the shares are on a prospective 2019 PE ratio of 14.8x falling to 7.0x in 2020. Finncap has a target price of 140p, which would value the shares at 9.0x 2020 numbers. That would still be far too low given the growth. The proof will be in the execution, but I think if you dig deeply¬†enough, there is evidence today that it is on the right track.
I have just added, taking the position to 4.0%. I paid 106.7p per share.¬†