One of the things about broad market sell offs is that they can create opportunities to buy into stocks who are performing well operationally, however their prices had previously done so well, investors were reluctant to take the plunge.
One such stock is Mader (ASX:MAD). Over the past 24 months the stock has increased from 90 cents to eventually reach a peak of $4.84 in February. While the days of 90 cents are well and truly behind it (investors hope), the recent market nervousness has seen the price fall 20% from its peak.
So is this indeed an opportunity for those who missed out on the ride the first time around?
For those unaware, MAD provides specialist labour for the maintenance of heavy equipment in the resources and energy sectors. They also deliver a range of ancillary services such as electrical and mechanical maintenance in the rail, power generation, and marine markets.
Founded in 2005, and subsequently listing in 2019, today the company has operations in Australia, North America, Africa and Asia. Australia still accounts for the majority of revenue and profit, though the company has big aspirations for its North America business, more on that in a moment.
Source: MAD results presentation FY22
Companies in the outsourced maintenance services industry generally compete on price, quality of services, and just as importantly, capacity to provide services.
The company positions itself cheaper than equipment specialists (manufacturers) but on better quality and reliability than lower cost recruitment-based labour hire firms. Their ability to be flexible with the wide brand names they work with is also a major benefit over single supplier equipment specialists.
With over 2,500 technicians on staff, there are almost no other competitors that can deliver the wide range of services MAD does.
StockRank
Since late 2020 the stock has hovered around a StockRank of 80, currently finding itself at 76, most likely on account of the recent drop off in Momentum.
From a QualityRank perspective the company rates highly at 85. With most Quality metrics bright green, the question some may ask is why is it…
