Now that we've seen the FY numbers, have any of you been persuaded to buy some EOH?
On the surface, the numbers seem pretty decent in the current environment, and management seem confident of, at least, maintaining this level of growth. The PEG is well below 1 (around 0.80), if this growth can be maintained ( big if!).
Or, are the corruption allegations, which have not disappeared (and may never!), posing too big a risk??
Any thoughts are appreciated.
FNB Securities analyst Chantal Marx says: "In SA the IT sector is very interesting because it’s super-fragmented. EOH is the largest market-share holder, but only has 2% market share, so that gives you an idea of what opportunities are still out there."
The company is "printing" money, says Marx. Cash generated by operations surged to R1.4bn in the year, from R917m the year before.
Marx believes EOH will be able to boost margins as it beds down recent acquisitions. She describes the company’s p:e rating as "crazy" given its expectation that it will grow by 15%-20% over the next five years.