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Yet the stock has since pulled back as several directors have offloaded stock
Thursday 22 Nov 2018 Author: Daniel Coatsworth

AB Dynamics (ABDP:AIM) £14.85

Gain to date: 58.4%

Original entry point: Buy at 937.5p, 21 December 2017

Full-year results from AB Dynamics (ABDP:AIM) triggered a new share price rally and took the stock to an all-time high of £16.50. The stock has since eased back amid several directors selling shares.

We aren’t overly concerned by the director disposals as they have certain windows during the year to offload stock, due to strict trading rules, and it gives them an opportunity to crystalise some gains following a spectacular year for the business.

AB Dynamics grew adjusted pre-tax profit by 45% to £8.61m. Speaking to Shares, the company admits there is a risk it may receive more orders than it could fulfil, hence why it is now outsourcing certain activities to third parties.

It says investment plans will dilute operating margins, although it doesn’t expect them to decline too much and for too long.

The company insists it is seeing no signs of car manufacturers reducing development spend, particularly as the traditional players are under pressure from new market entrants – namely tech firms.

New chief executive James Routh says his appointment provides an opportunity to refresh the corporate strategy and he will look at plans for research and development, acquisitions and more over the next few months.

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