On a roll...
ALTX-LISTED ONELOGIX is currently making an attractive investment case, thanks to the solid financial fundamentals of the transport and logistics company. OneLogix has an earnings multiple of 9,62, considerably higher than the AltX average equivalent. However, it’s offering strong growth opportunities and the 126% leap in its share price over 2010 (against 9% growth in the AltX index as a whole over the same period) is evidence the group is showing appeal. Would-be investors would be wise to buy the stock now in case it enters overpriced territory. OneLogix is on an upward earnings path, bar a slip during the 2009 economic slowdown. Most recent earnings have recovered at levels over 20% higher than its 2008 peak.
OneLogix’s main line of business is transporting commercial and consumer vehicles countrywide and into surrounding regions. This market is currently in a sustained recovery mode following a near-disastrous slowdown in 2008/2009. Vehicles sales aren’t expected to reach last year’s heady 20% (and plus) growth rates, which were as a result of extremely low base numbers but should sustain at lively levels, according to market commentators.
The company has stated it’s on the acquisition hunt for assets, which would complement its existing logistics offering, following the successful acquisition of niche bulk haulage company RFB Logistics more than a year ago. Another recent add-on has been Atlas Panelbeaters, which specialises in heavy commercial vehicles. OneLogix is currently in a strong cash position to allow for expansion: the group ended its 2010 financial year with cash reserves of R60,2bn – a vast improvement from the R27,4bn cash position reported at year-end 2009. Debt to equity is at a manageable 1,08.
There are some risks present at OneLogix: namely some squeezing of profit margins at its key vehicle transportation divisions. Management is attempting to mitigate that with entry into new markets, although any success remains to be seen in its next interim results.