SDVKF - Alleima: A Stainless Steel Niche Player At 5.5 Times EBITDA

2024-07-03 10:00:00 ET

Summary

• Alleima exceeded expectations with robust 2023 results, reporting strong free cash flow and a 7% increase in EPS.
• Despite a temporary dip in net profit expected for FY 2024, consensus estimates show growth in EBITDA for 2025 and 2026.
• Alleima's stock price remains attractive, trading at 5.5 times next year's EBITDA with a solid balance sheet and stable dividend payout ratio.

Introduction

Almost 18 months ago, I discussed Alleima ( OTCPK:SAMHF ) in an article here on Seeking Alpha . The company had just been spun off from Sandvik ( OTCPK:SDVKY ) ( OTCPK:SDVKF ) and I argued the stock was trading too cheap as it was trading at less than 4 times its EBITDA. I was also expecting the company to generate in excess of 1B SEK in free cash flow in 2023, and I think this may be a good time to follow up on Alleima and see if the company has met my expectations and to see what we can expect in the near future....

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