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Is it time to buy Aalberts stock as it divests Standard Hidráulica Group?

on Dec 15, 2021
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  • Aalberts shares on Tuesday edged slightly higher after divesting Standard Hidráulica Group.
  • It said it had reached an agreement to sell 100% of its shares in the Barcelona, Spain-based company.
  • The divestiture was completed at the beginning of this month, two years after the company revealed the plans.

On Tuesday, Aalberts NV (LON:0NX1) shares edged slightly higher after divesting 100% of its shares in the Barcelona, Spain-based water piping and accessories company, Standard Hidráulica Group (STH).

STH reports annual revenues of about EUR 90 million and also has a presence in South Africa, the United Kingdom and Greece. Aalberts had disclosed in 2019 a grand plan to divest some of its assets, which included STH. The divestiture of STH concluded on the 1st of December.

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In the company’s half-year results reported in July, Aalberts outperformed analyst expectations on revenue and earnings for the first time in two years, triggering a significant spike in the stock price.

Although Aalberts shares have pulled back nearly 7% since the 19th of November, the stock is still up more than 42% this year.

Is Aalberts a good bet?

From an investment perspective, Aalberts shares trade at a reasonable price-earnings ratio of 26.38, thus making the stock an interesting option for value investors. 

However, although Aalberts is a dividend-paying stock, its forward yield of just 1.14% may be less attractive to dividend investors.

Source – TradingView

Technically, Aalberts shares seem to have recently pulled back to find support off the 100-day moving average. As a result, the stock gained slightly to move towards the trendline resistance of the descending channel formation.

However, with shares far from reaching overbought conditions, investors could target extended gains at about $55.06, or higher at $57.12. On the other hand, $51.00 and $48.68 are crucial support zones.