Fund Manager Summary
The fund managers believe that SGH Ltd presents a compelling investment opportunity due to its strong trading update and double-digit earnings growth expectations for its WesTrac and Coates business units in FY23. These units are projected to drive growth, representing two-thirds of Group earnings, as investments in mining, construction, and infrastructure increase. Additionally, the fund managers highlight SGH's significant stake in Boral, a major player in the building materials sector, which could see earnings more than double under new leadership and improved trading conditions. Overall, the fund managers express confidence in SGH's potential for medium-term growth.
Source: Trading View
Commentary From The Managers
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Blackwattle Investment Partners
30 Sept 2025
$49.93
Summary
- Blackwattle Investment Partners updates their investment thesis on SGH Ltd.
- Current stance is to short SGH, indicating a caution/sell position.
- Respect for Ryan and Richard due to their strong capital deployment track record.
- Valuation analysis shows higher-quality investment opportunities available elsewhere.
- Concerns about the cyclicality of several underlying businesses within SGH.
- Recent strong performance has raised caution regarding sustainability.
- Balance sheet is at circa two times, limiting flexibility for future capital deployment.
- Overall, Blackwattle Investment Partners remains on the sidelines for now.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Blackwattle Investment Partners
30 Sept 2025
$49.93
- Blackwattle Investment Partners updates their investment thesis on SGH Ltd.
- Current stance is to short SGH, indicating a caution/sell position.
- Respect for Ryan and Richard due to their strong capital deployment track record.
- Valuation analysis shows higher-quality investment opportunities available elsewhere.
- Concerns about the cyclicality of several underlying businesses within SGH.
- Recent strong performance has raised caution regarding sustainability.
- Balance sheet is at circa two times, limiting flexibility for future capital deployment.
- Overall, Blackwattle Investment Partners remains on the sidelines for now.
Summary
Paradice Investment Management
30 Sept 2025
$49.93
- SGH underperformed during the quarter due to disappointing FY2026 guidance.
- Growth is anticipated to be 2H26 weighted, with construction activity not expected to see a meaningful pick-up until CY2026.
- WesTrac growth is expected to moderate against recent periods as elevated capital sales begin to normalize from high levels.
Summary
Ten Cap
31 Aug 2025
$50.41
- Increased position in Seven Group (SGH) due to rising conviction in earnings trajectory.
- Management's execution is viewed positively.
- SGH offers visible medium-term growth.
- Solid cash generation is a key factor.
- Provides attractive exposure to a domestic investment cycle.
- Expectations that conditions will improve over time.
Summary
Glennon Small Companies
31 July 2025
$51.26
- Glennon Small Companies notes that SGH Limited (ASX: SGH) shares experienced a 5.2% decline following the announcement of Vic Bansal's transition to a nonexecutive role at Boral in early 2026.
- Analyst sentiment has been tempered by concerns regarding the long-term growth potential of some of SGH's investments.
- Particular focus is on SGH's 30% stake in Beach Energy, which is currently facing operational challenges.
- Despite these challenges, SGH has increased its full-year dividend, highlighting a commitment to ongoing capital return discipline.
- Glennon Small Companies continues to hold its position in SGH due to the company's dividend strategy and potential for recovery.
Summary
DS Capital
30 June 2025
$54.07
- SGH Group's share price increased by 43% over the year, reflecting strong earnings performance.
- DS Capital notes that SGH provides diverse exposure to mining, infrastructure, and construction, which are key growth sectors in the Australian economy.
- Boral's margin expansion was a notable highlight, showcasing the management team's effectiveness in turning around underperforming assets.
- WesTrac, a key mining services business, achieved earnings growth due to a 13% rise in equipment sales, despite price deflation in parts.
- WesTrac holds a 50% market share and benefits from a growing installed base and customer rebuild requirements.
- Coates, Australia's largest equipment hire business, experienced a 4% revenue decline, largely due to a 20% drop in Victoria, yet managed to improve margins through disciplined cost management.
- Despite the strong performance of the share price, DS Capital continues to expect attractive returns from SGH.
- There is speculation about potential further acquisitions by SGH, supported by the success of the Boral investment.
- The management team's strong record in capital allocation enhances investor confidence moving forward.
Summary
Airlie Funds Management
30 June 2025
$54.07
- Airlie Funds Management emphasizes the importance of the board's quality, integrity, and independence in aligning interests.
- Seven Group Holdings (ASX: SGH) has significantly contributed to fund performance, with a 45% increase in share price this year.
- The strong operational performance of Boral has been a key driver of SGH's success.
- SGH's operating model enables high-performing management to achieve operational excellence across business units.
- Under Vik Bansal's leadership, Boral's EBIT margins have reached their highest levels in over two decades.
- FY23 EBIT was $233m, with expectations of nearly $500m for FY25.
- Bansal's elevation to a non-executive board position ensures his continued influence within the organization.
- Ryan Stokes and SGH recognize that long-term value creation is driven by improved operational performance.
- Attracting and retaining talent is crucial for a founder-led organization, indicating its overall health.
- The lack of experienced independent directors contributed to failures in other companies, highlighting SGH's strength in talent.
- SGH showcases its talent during the annual Investor Day, where business unit heads present detailed strategies.
Summary
DS Capital
31 Mar 2025
$49.65
- SGH Group delivered another strong result.
- Boral was a standout with 29% earnings growth and better than expected margins.
- WesTrac, the mining services business, showed strong results with a 13% increase in new sales.
- Despite sales price deflation, management expressed optimism about increasing demand from key customers.
- Coates, the equipment hire business, faced challenges due to conditions in Victoria.
- SGH reiterated full year guidance for high single digit earnings growth, which has historically been conservative.
- DS Capital continues to hold due to these positive outlooks in core business segments.
Summary
Oracle Advisory Group
31 Dec 2024
$46.11
- SGH Ltd is the new name for Seven Group Holdings, a long-term investment for Oracle Advisory Group.
- The share price has experienced a strong run over the past two years.
- Oracle Advisory Group believes the valuation of the company has moved ahead of itself.
- Due to it being their largest position and a cyclical company, they decided to trim their holdings.
- Despite the trim, Oracle Advisory Group is positive about the outlook for the company.
Summary
Blackwattle Investment Partners
30 Nov 2024
$49.13
- Seven Group (SGH) was the largest contributor to the fund’s performance in November.
- Main businesses include WesTrac, Coates, Energy, and Boral.
- Blackwattle Investment Partners continues to hold due to SGH’s impressive track record of disciplined capital allocation and operational excellence under CEO Ryan Stokes.
- WesTrac’s EBIT growth: $205 million in 2011 to $623 million in 2024.
- Coates’ EBIT increase: $200 million in 2019 to $326 million in 2024.
- Owner’s Mindset culture drives operational excellence, empowering and holding executives accountable.
- Belief that SGH’s acquisition of Boral could be its most value-accretive deal.
- Prior to acquisition, Boral was mismanaged with poor pricing discipline and capital allocation.
- Under CEO Vik Bansal, Boral shows improvements from disciplined pricing and a focus on operational excellence.
- Although the construction market is currently softening, anticipated improvements will become evident as the cycle rebounds.
Summary
Oracle Advisory Group
30 June 2024
$37.24
- Oracle Advisory Group has reduced its position in Seven Group Holdings to 4% of the portfolio.
- This decision comes after Seven Group had become one of the firm's larger positions.
- The firm remains confident in the double-digit earnings growth potential of its key businesses, namely Westrac, Coates, and Boral.
- The outlook for these businesses is expected to remain robust over the medium term.
Summary
Oracle Advisory Group
31 Dec 2023
$37.18
- Oracle Advisory Group has reduced their position in Seven Group Holdings (SVW) by 2%.
- The decision follows a strong run-up in share price which exceeded their fair value estimate.
- Seven Group remains the largest position in their portfolio.
- The conglomerate offers diversification across three strong industrial brands: Westrac, Coates, and Boral.
Summary
Airlie Funds Management
31 Dec 2023
$37.18
- Seven Group experienced a strong quarter following its excellent FY23 results.
- The company has upgraded its earnings guidance due to the strong performance of its Westrac, Coates Hire, and Boral divisions.
- Seven Group reflects the strength of the Australian economy, driven by resources, infrastructure, and housing sectors.
- The ongoing resilience in iron ore, government spending, and consumer activity supports this growth.
- In the recent quarter, Airlie Funds Management has trimmed its position size in Seven Group.
Summary
L1 Capital
30 Sept 2023
$30.82
- Seven Group shares have risen by 26% following strong FY23 results.
- The company has provided a positive outlook for FY24, expecting high-single-digit EBIT growth.
- WesTrac and Coates have shown strong performance, positioning earnings for medium-term growth.
- Increased investment in mining, construction, and infrastructure sectors is expected to support this growth.
- Seven Group holds a 71.6% shareholding in Boral, a major player in building materials in Australia.
- Boral has faced challenges due to surging input costs and wet weather affecting earnings.
- Under new leadership, Boral has the potential to double earnings over the medium term from FY23 levels.
Summary
L1 Capital
31 Aug 2023
$27.96
- Seven Group Holdings shares gained after reporting strong FY23 results.
- FY24 outlook is positive with high-single-digit EBIT growth expected.
- WesTrac and Coates are performing strongly, with medium-term earnings growth anticipated due to increased investment in mining, construction, and infrastructure.
- Seven Group Holdings holds a 71.6% shareholding in Boral, a major player in Australian construction materials.
- Boral's earnings faced challenges from surging input costs and significant wet weather delays.
- With new leadership and in a normalized trading environment, Boral could potentially double its earnings over the medium term.
Summary
L1 Capital
31 Dec 2022
$20.99
- L1 Capital updates its investment thesis on Seven Group Holdings (SGH), which has seen a +24% rise in shares.
- The strong trading update at the AGM in November highlighted double-digit earnings growth expectations for WesTrac and Coates business units for FY23.
- These business units together account for approximately two-thirds of Group earnings.
- They are well positioned for strong medium-term growth driven by increased investment in mining, construction, and infrastructure.
- Seven Group has a 72.6% shareholding in Boral, a major building and construction materials company in Australia.
- Boral’s earnings have faced challenges due to rising input costs and widespread wet weather delays.
- Under new leadership and in a normalized trading environment, Boral could potentially more than double its earnings in the medium term from current levels.
- L1 Capital continues to hold its position in SGH, based on these growth prospects.
Summary
L1 Capital
30 Nov 2022
$20.96
- Seven Group Holdings shares increased by 14% following a positive trading update during their AGM in November.
- Expectations of double-digit earnings growth for the WesTrac and Coates business units in FY23.
- WesTrac and Coates contribute approximately two-thirds of Group earnings and are poised for significant growth.
- Growth driven by the ongoing investment in mining, construction, and infrastructure.
- Seven Group Holdings holds a 72.6% stake in Boral, a major player in the building and construction materials sector in Australia.
- Boral has faced challenges from rising input costs and delays due to wet weather.
- With new leadership and a more stable trading environment, Boral could potentially double its earnings over the medium term.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With robust growth on the horizon for key sectors, it seems SGH Ltd could be poised for a significant uptick. If Boral navigates its challenges effectively, the potential for earnings to double makes this an intriguing play for investors looking for value in a volatile market."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in SGH Ltd (ASX:SGH)?
Fund managers including L1 Capital, Blackwattle Investment Partners, Oracle Advisory Group, DS Capital, Airlie Funds Management, Glennon Small Companies, Ten Cap and Paradice Investment Management have invested in SGH Ltd (ASX:SGH).
Why do fund managers invest in SGH Ltd?
Fund managers are investing in SGH Ltd due to its strong trading performance and growth prospects. The company's key business units, WesTrac and Coates, are expected to achieve double-digit earnings growth, driven by increasing investments in mining, construction, and infrastructure. Additionally, SGH's significant stake in Boral positions it favorably for potential earnings recovery as market conditions normalize.
What happened to SGH Ltd (ASX:SGH)?
Fund managers have invested in SGH Ltd due to its potential for medium-term growth and solid cash generation, despite some concerns regarding leadership transitions and operational challenges in key investments like Beach Energy. The company’s commitment to returning capital through increased dividends reflects financial discipline. However, caution persists among some fund managers regarding valuation and cyclicality in underlying businesses, leading to mixed sentiments about the stock's future performance.