Graham Corporation

Graham Corporation (NYSE: GHM) is a multinational corporation that develops, manufactures, and distributes vital equipment for the defense, energy, and chemical/petrochemical sectors. Heat transfer equipment, liquid vacuum pumps, fluid systems, power systems, and other associated items are among the company's primary offerings.

Key Highlights

• The company reported a 20.63% rise in revenues to USD 20.16 million in Q1FY22 (ended June 30, 2021) compared to USD 16.71 million in Q1FY21.
• However, its net losses increased to USD 3.13 million in Q1FY22 vs. USD 1.82 million reported in Q1FY21, owing to a significant increase in selling, general, and administrative (SGA) expenses.
• It operates in a highly competitive market and faces considerable pricing pressure. As a result, profit margins are anticipated to remain constrained.
• GHM provided a Return on Equity (ROE) of 2.4% in FY21 (ended March 31, 2021), much lower than the peer average of 9.5%.
• GHM announced on August 24, 2021, that it received over USD 20 million in orders post Q1FY22 end, spanning the defense/space, energy, chemical/petrochemical sectors, and also included advanced energy applications and Heating, ventilation, and air conditioning (HVAC) spaces.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) SMA support levels, indicating a bearish trend.
• Stock is leaning towards the lower band of the 52-week range of USD 11.84 to USD 17.44.
• GHM's stock price has declined 26.41% and 17.44% in the past six and nine months, respectively.

Technical Price Chart (as of September 10, 2021). Analysis by Kalkine

Conclusion: Considering the global pricing pressure, increase in losses, decent balance sheet, and technical indicators, we recommend a "Watch" rating on the stock at the closing price of USD 12.40, up 0.16% as of September 10, 2021.

*The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.