Fund Manager Summary on Lindsay Australia Ltd (ASX:LAU)
Lindsay Australia Ltd (ASX:LAU) has been positively viewed by fund managers, particularly Centennial Asset Management, due to its strong position in the integrated transport and logistics sector, serving major supermarket and fresh produce chains. Commentators note that an investment made while the share price was around $0.88 has yielded significant outperformance as the company navigates shifting industry dynamics post-COVID, notably with reduced competition following the exit of a major trucking group. While opportunities for growth exist in leveraging these structural tailwinds, fund managers caution that the competitive nature of the transport industry remains a risk. The focus on maintaining robust relationships and adapting to evolving market conditions are critical considerations for investors looking at Lindsay's potential.
Commentary From The Managers
There are 3 insights from 3 fund managers regarding their investment in Lindsay Australia Ltd (ASX:LAU) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Centennial Asset Management
29 Jan 2025
$0.88
Summary
- Centennial Asset Management believes Zip has the potential to rally in the short term.
- Zip is well positioned to deliver further strong growth in revenues and profitability.
- The US buy now, pay later market remains relatively immature, allowing Zip’s US footprint to grow rapidly.
- New product launches are expected to contribute to the company’s transaction volumes and earnings growth in the coming year.
- Zip’s balance sheet strength and ongoing buyback are expected to support share price performance.
- Zip has surprised the market with better-than-expected earnings over the past year.
- The company has upgraded expectations post the most recent quarter, indicating potential for additional upside earnings risk.
Contract Asset Management
31 May 2024
$0.91
Summary
- Contract Asset Management highlights a new position in Lindsay Australia Limited (LAU), currently trading below $0.90 after previously exceeding $1.40 this financial year.
- The firm has a long-standing relationship with this family-led business, included in the BKI Investment Company portfolio.
- Lindsay Brothers Transport, established in 1953, is recognized as one of Australia’s leading integrated transport, logistics, and rural supply companies.
- LAU operates from 16 terminals with over 1000 vehicles, serving Australian farmers across the supply chain.
- In early May, LAU management slightly revised its EBITDA guidance downwards due to weather disruptions, viewed as a short-term challenge.
- Contract Asset Management believes that the seasonal volatility is adequately reflected in the current share price.
- Forecasts indicate LAU is trading on a P/E of 7x and offers a grossed-up dividend yield of over 7%.
- The company’s Balance Sheet is robust, and its competitive position has strengthened in recent years.
- Contract Asset Management remains optimistic about the future prospects of both the business and the stock.
Cerutty Macro Fund
31 Oct 2023
$0.97
Summary
- Cerutty Macro Fund has recently added Lindsay Australia Ltd (LAU) to its portfolio.
- The investment was initiated due to LAU trading at a significant discount to fair value.
- Lindsay's conservative valuation reflects a market assignment of less than an 8x forward earnings multiple.
- This valuation is notably below its historical average of approximately 12x and the peer group average of around 13.4x.
- Management guidance indicates EBITDA growth between 15-20% for FY24, supported by asset integration.
- Expected EBITDA growth over FY25 is projected to exceed 10%.
- Recent developments in the Australian logistics market have positioned LAU favorably.
- The liquidation of Scott’s Refrigerated Logistics has opened opportunities for LAU.
- Cerutty believes LAU is well-placed to absorb the market share now available, enhancing its position in refrigerated goods transport.
- This increases Lindsay’s pricing power during a time of elevated inflation.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Lindsay Australia Ltd (ASX:LAU)?
Fund managers including Cerutty Macro Fund, Centennial Asset Management and Contract Asset Management have invested in Lindsay Australia Ltd (ASX:LAU).
Why do fund managers invest in Lindsay Australia Ltd?
Fund managers invest in Lindsay Australia Ltd due to its strong position in the transport and logistics sector, particularly in dry and refrigerated transport services. The company serves key clients such as major supermarket and fresh produce chains, which enhances its revenue stability. Post-COVID market changes have also repositioned Lindsay favorably within a competitive landscape, improving growth prospects. Additionally, the stock has shown strong performance, making it an attractive option for those seeking potential dividend yield and solid risk/reward metrics.
What happened to Lindsay Australia Ltd (ASX:LAU)?
There have been no recent updates from fund managers regarding Lindsay Australia Ltd although fund managers including Cerutty Macro Fund, Centennial Asset Management and Contract Asset Management have previously commented.
What is the short interest in Lindsay Australia Ltd (ASX:LAU)?
The short interest in Lindsay Australia Ltd (ASX:LAU) is 0.07% which makes it the 433rd most shorted stock on the ASX. Of the 364.6M shares that Lindsay Australia Ltd has on issue, 249.1K have been sold short.
What does Lindsay Australia Ltd (ASX:LAU) do?
Lindsay Australia Limited (LAU) is an integrated transport, logistics and rural supply company working in partnership with Australian farmers at all levels of the supply chain.