Freedom Group - profit up 200%

  1. 2,218 Posts.
    For either a longer term investment or a trade, people might want to look at Freedom Group (FFL). Results out today show a 200% increase in profit over last year (but this was only for nine months, so a more accurate increase year on year more be about 120-150%). With a DPS of 15.5c, this puts it on a EPS of less than 12 (at average prices yesterday 1.83-1.85). Dividend declared is 6c, total 10c for the year or a very respectable yield of 5.5% FF. Cost efficiencies, acquisitions and some organic expansion should see EPS continue to grow. Also, the lagged effect of housing starts on FFL sales should see FFL continue to benefit from the housing boom for some time, although I guess this would moderate from 2003 onwards.

    Its useful I think to compare FFL with Fantastic Furniture (FAN). FAN drifted a bit like FFL over the last month or so, but has now put on 25% in the last 2 weeks (from 1.32 to 1.66), although FANs result was fairly predictable. FFL is on an EPS of about 17, or 50% more than FFL, and a yield of about 3%.

    Angus

    I hold FFL
 
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