SOMERO ENTERPRISES (SOM:AIM) 521.9p

Gain to date: 100.7%

Original entry point: Buy at 260p, 24 September 2020

The surge of online shopping continues to seed demand for Somero Enterprises’ (SOM:AIM) concrete flooring flattening kit and its share price. The stock is up more than 65% this year but there could be nearly 50% of further upside over the next 12 months if analysts have crunched their numbers right.

Last week the company raised its 2021 growth guidance thanks to surging demand recovery in its key US market as the economic bounce back continues. Somero designs and manufacturers top of the line laser-guided concrete floor flattening equipment that is becoming vital for the acres of automation-laden warehouse space needed as more businesses embrace digital commerce.

Somero told the market on 6 December that strong momentum has continued right through the second half of the year and it will now beat previous revenue and profit expectations.

Guidance was lifted by 8% for revenue and by 7.2% for profit, and the company should have $39 million net cash at the end of December.

That’s great news for dividends which are forecast to increase a $0.10 this year to $0.449, with forecasts for next year implying an income yield of 7.4%.

SHARES SAYS: Somero remains a highly compelling capital growth and income investment, and the company could easily become a buyout target. Keep buying the shares. 

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