LaserBond (ASX:LBL) is a Small Cap with Big Potential
LaserBond (ASX:LBL) is a high potential ASX small cap. This interview with Jason McIntosh appeared on Ausbiz on 8 April, 2021.
Host: What have your algorithmic motion detectors identified in the market?
Jason: LaserBond is a stock I've been looking at. It’s a really interesting small cap with a market cap of about $70 million. It's not in the All Ordinaries, but they're a world-class leader in surface engineering technology. What that means is that they're involved in industries which use capital intensive equipment.
One sector they work with is the mining industry. They’ve got clients like BHP and in Rio. And what makes their technology valuable is that it increases the wear life on the components within machinery. This helps to increase productivity and reduce maintenance cost.
I think this is a real under the radar growth story. The company’s revenue has been steadily increasing from $9.6m in 2015 to $22.7m in 2019. Last year saw it drop back to $22.2m, but the company says that this was largely due to COVID related issues.
Management has said they are targeting around $26m revenue for 2021, and $40m for 2022. They base this increase off several factors including acquisition targets, a record number of open quotes, and a recovery in the US steel industry. And based on their track record, I think this is entirely achievable.
I really like how the stock is shaping up on the chart. It ran from 10 cents in early 2018 to nearly a dollar in mid-2019. But like a lot of emerging growth stories, it just ran too far too quickly. I think the last 18 months have been constructive. The shares have done some back and filling which helps to create support not far from current levels. And now we're starting to see emerging momentum come in on the back of a good growth story, and that emerging momentum is what triggered my interest.
When you look behind the momentum, there’s a really interesting story there. I believe that LaserBond is one of those stocks that, over the next couple of years, could run a 100% plus.
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I'm Jason McIntosh, the creator of Motion Trader. My career began in 1991 on the trading floor at Bankers Trust. Nowadays, I trade my own systems from home in Sydney.
Motion Trader is for investors who value robust analysis, data driven entry and exit signals, commentary, and education. I use engineered algorithms to identify when to buy and sell ASX stocks. No biases or guesswork, just data driven signals.