• Mark Watson-Mitchell

SDI Group - shares now up 38% in six weeks

It has taken just six weeks for SDI Group (LON:SDI) to achieve my Target Price, and there is still so much more to go for.


This AIM quoted group is focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing control applications.


Earnings enhancing purchase


Late last week (Thursday 3rd December) the group announced its £5.8m acquisition of Monmouth Scientific, which is a maker of biological safety cabinets, fume cupboards, laminar flow cabinets and cleanrooms.


Monmouth has been doing very well recently, enjoying high demand for its Covid-19 testing infrastructure.


This immediately earnings enhancing deal has really helped to boost the SDI share price.

And in looking at some research from SDI’s brokers, finnCap, it would appear that there is more to come. They suggest that the contribution from this deal is 14% accretive in its first full year.


Deal fits in with the group's growth strategy


Ken Ford, the group’s Chairman stated that: "Monmouth Scientific is a further step in our Group growth strategy. It is a complementary fit with our stable of businesses providing laboratory equipment and generates areas for potential growth.”


Interim results due on Wednesday


We should be getting some more bullish comments from the company when it announces its interim results to end October on Wednesday of this week (9th).


In the meantime, the group’s shares have risen another 6% today at close at 105.5p.


More to go for suggests finnCap


That is a 38% rise in those six weeks, while the brokers now have increased their price objective up to 125p. So yes there is more to go for!


(Profile 28.10.20 @ 76p set a Target Price of 95p*)


(* denotes that the Target Price has been attained subsequent to publication)