Why the GUD (ASX:GUD) share price is pushing higher today.

The GUD Holdings Limited (ASX:GUD) share price is on the move on Thursday following the release of a trading update…
The post Why the GUD (ASX:GUD) share price is pushing higher today. appeared first on The Motley Fool Australia. –

hand on touch screen lit up by a share price chart moving higher

In morning trade the GUD Holdings Limited (ASX: GUD) share price is pushing higher.

At the time of writing, the diversified products company’s shares are up 1% to $13.34.

Why is the GUD share price pushing higher?

Investors have been buying the company’s shares following the release of a trading update after the market close on Wednesday.

According to the release, the company’s performance during the third quarter has been in line with expectations.

The Automotive business has experienced strong workshop end user demand, which has underpinned year to date organic sales growth of 15%.

Management also revealed that it could be adding to the business in the near future. It advised that there is no shortage of aftermarket acquisition opportunities. Though, it will maintain its disciplined approach, with adherence to clearly defined acquisition and pricing criteria.

Things aren’t quite as positive for the Water business. Its year to date organic sales are up 4% over the prior corresponding period. However, management notes that COVID lockdown impacts are continuing as production ramps to meet a sales backlog with associated incremental costs.

This includes shift penalties, outwards/export air freight, partial factory closure, which are impacting margins. Positively, though, management advised that the company has a strong inventory position to support demand.

One concern for investors, which is likely to be holding back the GUD share price a touch today, is that its cost inflation is slightly above levels flagged with its first half results. This is being driven by freight costs and supplier price rise requests, which are under negotiation

Despite this, management has positively narrowed its FY 2021 underlying earnings before interest and tax (EBIT) guidance to $98 million to $100 million. This compares to its previous guidance of $95 million to $100 million. The company has also retained its cash conversion target of ~80% to 85%.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the GUD (ASX:GUD) share price is pushing higher today. appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!