Market's view on FDM Group
Published on April 2024
- A Stock watcher noted that for those interested in remaining within the same sector but prefer an award-winning SME consulting firm that is expanding organically, Triad Group Plc is recommended.
- Concerns were voiced about the company being the weakest performer on the FTSE for the day.
- Questions arise regarding whether the 2023 results are delayed, as last year’s results were released earlier.
- A positive financial position was highlighted, with 47 million in the bank and no debt, yet an ironic note on how the market values companies higher when they are in debt.
- Overall size and profitability concerns were discussed, with a particular focus on the declining number of consultants and the negative impact on growth despite a high gross margin.
- The high dividend yield of 8.80 was questioned, especially for a software company, suggesting it is unusually high.
- The new procurement Bill could make it difficult for larger companies, including FDM, to win UK government contracts, with an emphasis on the Bill’s potential to favor SMEs by simplifying the bidding process and reducing entry barriers.
- A Stock watcher expressed confidence in the stock as a potential takeover target due to its strong financial position and alignment with market expectations.
- The CEO’s optimistic comments about client engagement and returning confidence were highlighted, suggesting a potential positive shift in business dynamics.
- FDM’s attractive valuation and financial strength were pointed out, including its robust balance sheet, significant cash reserves, and appealing dividend, positioning it as a possible bid opportunity.
- Speculation about the reasons behind a significant stock price rise included potential undisclosed approaches to the company.