Johns Lyng Group Ltd [ASX:JLG]. Have you heard of them before?
Yeah, me neither.
The share price of John Lyng Group are up over 250% since November 2018.
The company is in the building services industry. They build and restore properties across Australia.
The company’s restoration business profits from damage by insurable events.
More on this shortly.
You may wonder is now the time buy? Today, we’ll take a look.
Who are Johns Lyng Group?
Johns Lyng Group Ltd call themselves a ‘market leading integrated building services group’.
The company’s core business is to rebuild and restore properties.
JLG gets the bulk of its business from insurance companies, enterprises, and governments.
It gets those jobs from insurance companies when damage caused is an insurable event.
An insurable event is any damage caused by weather, fire, or structural impacts.
And with the current natural disasters in Australia, the upticks in insurable events should benefit the company.
The company has recently upgraded its earnings guidance for 2020.
This is good news for investors.
JLG said they are expecting revenue to hit $420 million. This is a 5% increase on its 2019 guidance.
EBITDA has increased by 11% to $32 million. EBITDA is earnings before interest, taxes, depreciation, and amortisation.
This is a small company with a market cap of only $575 million.
The average daily trading volume for the company is around $200,000.
That means it’s fairly illiquid. An illiquid share can be hard to get in and out of.
Look, I’ll show you the chart.
JLG share price chart
What you’re looking at above is the daily chart of JLG.
I’ve placed two green rectangles on the chart. This highlights the daily price action of the bar.
You’ll see some bars open and close at the same place. They also are very short bars. This indicates a low level of trading from investors.
That means it can be hard to get in and out of the share…if no one wants to buy your stock.
If JLG is to become a buy, you’d want to see a decent amount of history with good levels of volume.
Until that happens, it’s not a share I’d speculate in.
As always, this is not a recommendation to buy or sell JLG. It is an update only. I hope you found it useful.
Until next time,
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