Businessman Zed Koudounaris is topping up on Innscor shares — again.
He has just spent US$256,143 buying more stock in the country’s biggest food producer at around 47 US cents per share. The move mirrors what he did around the same time last year, when he scooped up shares worth US$258,153. Koudounaris now has 109,189,308 shares in Innscor.
His investment vehicle, ZMD Investments, already owns close to 20% of Innscor. It is also the biggest shareholder in Axia, Padenga and Simbisa, companies that were spun off from Innscor over the years and are now listed and run separately. Koudounaris’ fresh buy comes as stockbrokers IH Securities are upbeat on Innscor’s prospects.
“In our view, Innscor will see revenue growth of 22.1% in the current year to US$981.77 million, supported by volumes performance. We anticipate EBITDA margin to increase to 10.2% on account of a gradual improvement in efficiencies,” IH says in a new research note. IH believes Innscor is still undervalued, trading at a price-to-earnings (P/E) ratio of 6.3x — which means investors are paying US$6.30 for every dollar of the company’s earnings. That’s well below the average of 13.8x among Innscor’s peers. At 3x, Innscor’s EV/EBITDA ratio, a measure of a company’s value, is also lower than the sector average of 7.9x, another signal that the stock may be underpriced.
“Innscor has a target price of US$0.75, suggesting a potential upside of 60% at current levels. We therefore place a BUY rating,” says IH. Innscor closed Tuesday at 49 US cents per share.
