Five Interesting Takeaways: SGI

1. A dividend is coming: Stealth Group generated $2.4 million in free cash flow for the first-half of FY24 (1H23: $1.2 million) which supported the ongoing repayment of debt. The company said this sets the "stage for maiden dividend announcement for FY24."

2. Sizeable cash position: The company has $8.8 million cash and a market cap of $27 million, which gives us an enterprise value of $18.2 million.

3. Resilient categories: "Over 95% of Stealth's products are non-discretionary. As an 'all-weather' distributor, Stealth is well-positioned to withstand economic downturns," the company noted in its full-year FY23 results, adding that "despite fluctuations in economic conditions, the demand from mining, resources, transportation, infrastructure, construction, repairs-maintenance, and the home improvement market provide long-term resilience for the Company."

4. Full-year outlook: The half-year FY24 result pointed to some relatively vague full-year targets, including total organic sales growth of more than 10%, net profit before tax to exceed FY23 and EPS growth of more than 25%. Stealth Group is targeting $300 million revenue by FY28.

5. Breaking out: Stealth shares are trying to break out to five-and-a-half-year highs.