Investment Report: Capral Limited (Ticker: CAA)

Company Overview

Capral Lim­it­ed oper­ates with­in the alu­mini­um man­u­fac­tur­ing indus­try, pri­mar­i­ly focus­ing on the pro­duc­tion, mar­ket­ing, and dis­tri­b­u­tion of fab­ri­cat­ed and semi-fab­ri­cat­ed alu­mini­um prod­ucts through­out Aus­tralia. The com­pa­ny offers a diverse prod­uct range, includ­ing but not lim­it­ed to win­dows, doors, fram­ing sys­tems, cur­tain walls, and var­i­ous hard­ware. Their prod­uct lines are mar­ket­ed under sev­er­al brands, includ­ing Urban, Arti­san, and Amplimesh, cater­ing to res­i­den­tial, com­mer­cial, and indus­tri­al cus­tomers. Estab­lished in 1936 and based in Hunt­ing­wood, Aus­tralia, Capral Lim­it­ed has sig­nif­i­cant­ly evolved since its incep­tion, adapt­ing to chang­ing mar­ket demands and tech­no­log­i­cal advance­ments.

In terms of our val­ue check­list, it has some strengths and some weak­ness­es.

We did this analy­sis when the share price was $9.73.

STRENGTHS

Financial Health Assessment

The finan­cial health rat­ing is clas­si­fied as strong, with a sta­ble trend. This sug­gests that the com­pa­ny main­tains a sol­id bal­ance sheet and is well-posi­tioned to nav­i­gate eco­nom­ic fluc­tu­a­tions. A robust finan­cial stand­ing can act as a safe­ty net for investors, indi­cat­ing less risk asso­ci­at­ed with default or insol­ven­cy.

Price to Operating Cash Flow Ratio

The Price to Oper­at­ing Cash Flow ratio is a cru­cial met­ric that indi­cates the num­ber of years it would take for the com­pa­ny to gen­er­ate enough cash to cov­er its stock price. With a cur­rent ratio of 2.42, which is below the desir­able thresh­old of 7, this presents a favourable indi­ca­tion of poten­tial under­val­u­a­tion. Investors might view this as a sign that the stock could be worth more than its cur­rent trad­ing price.

Book Value Assessment

From a val­u­a­tion per­spec­tive, the share price is low­er than the book price, which can be seen as a pro­tec­tive mea­sure for investors. Addi­tion­al­ly, it pass­es the “book plus 30%” test, mean­ing the stock trades at a price that is accept­able rel­a­tive to its book val­ue. Ide­al­ly, the aim would be to pay no more than $1.33 for every $1 of equi­ty to ensure a safe­ty mar­gin, as advised by val­ue invest­ing prin­ci­ples.

Consistency of Equity Growth

The com­pa­ny has con­sis­tent­ly increas­ing equi­ty, demon­strat­ing effec­tive man­age­ment and oper­a­tional effi­cien­cy. This trend serves as a pos­i­tive indi­ca­tor for investors regard­ing the long-term via­bil­i­ty and growth poten­tial of Capral Lim­it­ed.

WEAKNESSES

Intrinsic Value

In terms of intrin­sic val­ues, the avail­able data indi­cates that the share price is above our Intrin­sic Val­ue 1 (IV1). Unfor­tu­nate­ly, there is no avail­able EPS Fore­cast, so we can’t cal­cu­late an Intrin­sic Val­ue 2 (IV2) for com­par­i­son.

Average Daily Turnover

Capral Lim­it­ed has an aver­age dai­ly trade of $0.083 mil­lion, clas­si­fy­ing it as a small-cap stock. This clas­si­fi­ca­tion implies that poten­tial investors should con­sid­er the liq­uid­i­ty risk asso­ci­at­ed with small­er com­pa­nies, par­tic­u­lar­ly when strate­gis­ing their exit. Investors pur­chas­ing larg­er parcels may find it hard­er to exe­cute trans­ac­tions with­out impact­ing the share price sig­nif­i­cant­ly, which is an essen­tial con­sid­er­a­tion for port­fo­lio man­age­ment.

Dividend Yield

Cur­rent­ly, the div­i­dend yield is not high­er than the bank debt rate, mean­ing it can­not receive a pos­i­tive score for this met­ric.

Price-to-Earnings Ratio

The cur­rent Price-to-Earn­ings (PE) ratio is val­ued at 5.96 and does not score pos­i­tive­ly as a “Record Low 6 PE”.

Ownership Structure

The direc­tors of Capral Lim­it­ed hold 0.00% of shares, which indi­cates a lack of sub­stan­tial align­ment with share­hold­er inter­ests, which may raise con­cerns for those who pre­fer to invest in com­pa­nies where man­age­ment has a note­wor­thy stake in the busi­ness.

Market Sentiment

No recent 3‑point upturn has been iden­ti­fied, sug­gest­ing sta­bil­i­ty in mar­ket sen­ti­ment regard­ing the stock.

CONCLUSION

Quality and QAV Scores

The Qual­i­ty Score stands at 67%, indi­cat­ing a rea­son­ably healthy com­pa­ny pro­file, though it falls short of the ide­al thresh­old of 75%. The QAV Score of 0.28 is strong and places it towards the upper ech­e­lons of our week­ly buy list.

Met­ric	Val­ue
Com­pa­ny Name	Capral Lim­it­ed
Tick­er	CAA
Cur­rent Share Price	$9.73
Aver­age Dai­ly Trade	$0.083 mil­lion
QAV Score	0.28
Qual­i­ty Score	67%
Price <= Con­sen­sus Val­u­a­tion	No
Price <= Intrin­sic Val­ue 1	No
Price <= Intrin­sic Val­ue 2	Not Avail­able
Price <= Book Price + 30%	Yes
New 3‑point upturn	No
Growth/PE Ratio	Not Avail­able
Growth/PE > 1.5	Not Avail­able
Price < Book Price	Yes
Con­sis­tent­ly Increas­ing Equi­ty	Yes
Yield > Bank Debt Rate	No
Finan­cial Health Rat­ing	Strong
Finan­cial Health Trend	Sta­ble
Fore­cast IV > 2 x Cur­rent Share Price	No
Direc­tors Own Sig­nif­i­cant Shares	No
% Hold­ing of All Direc­tors	0.00%
EPS Fore­cast Year 1	nan
PE (Price-Earn­ings Ratio)	5.96
Record Low P/E (last 6 peri­ods)	No
Price to Oper­at­ing Cash Flow	2.42
Price to Oper­at­ing Cash Flow <= 7	Yes

While the val­ue met­rics are mixed, it has a pos­i­tive QAV score and ranks high on our week­ly buy list.

Disclaimer

QAV has made every effort to ensure the reli­a­bil­i­ty of the views and rec­om­men­da­tions expressed in the reportspub­lished on its web­sites. QAV research is based upon infor­ma­tion known to us or which was obtained from sources which we believed to be reli­able and accu­rate at time of pub­li­ca­tion. How­ev­er, like the mar­kets, we are not per­fect.

This report is pre­pared for gen­er­al infor­ma­tion only, and as such, the spe­cif­ic needs, invest­ment objec­tives or finan­cial sit­u­a­tion of any par­tic­u­lar user have not been tak­en into con­sid­er­a­tion. Indi­vid­u­als should there­fore dis­cuss, with their finan­cial plan­ner or advi­sor, the mer­its of each rec­om­men­da­tion for their own spe­cif­ic cir­cum­stances and realise that not all invest­ments will be appro­pri­ate for all sub­scribers.

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