Stock Quickie – IFM:ASX

Infomedia – IFM:ASX

How did we get here?

I came across this while looking through stock screeners: Australian Solid Balance Sheet and Fundamentals (Simply Wall St).

*/For some reason I keep getting car parts companies show up in my searches: NTD, SFC, now IFM. Maybe I should just buy Tesla…/*

What do they do?

They make parts and service centre software for the auto industry. 

Weighing machine

A relatively good Return on Equity of between 23-30%, but has dropped to the lower end of that in recent years; margins are good at 16-20% and no debt. Growth is decent at roughly 15% with a middling dividend yield (>2.4%). Low insider ownership (1.9%, ~$10M in shares), but enough to have skin in the game. I’d classify this as a “Quality company”.

They have also managed to grow sales and book value consistently for the past 10 years. 

Their earnings have been a bit flat despite the sales growth. Not sure why as margins seem to be relatively steady, which could be an indication of acquisition.

Voting machine

They are in a trendy sector and are trading at about the sector average (36.9x) (vs 15.6x for the AU market). This is also the all time high for the company. 

Other options

TNE, CL1, VGL

Worth looking further?

Not really. I’m biased towards the software industry, and these smaller players in niche industries always call to me (even if a number of Mockers dislike enterprise software). I’m not sure how much this particular industry speaks to me (especially if we compare it to other companies I’ve recently looked at e.g. CL1, VGL).