Acquisition Sees Traffic Technologies Upgraded To Strong Buy

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The analysts at Austock were already positive on Traffic Technologies (TTI), rating the stock a Buy, but following the company’s announced acquisition of Guard Rail Installations (GRI), they have lifted their recommendation even further, to Strong Buy.

The $5.25m purchase will advance TTI’s strategy of becoming a one stop traffic management company and it is its "most significant acquisition" thus far, the analysts say.

The deal is forecast to add 12.7% to FY07 EPS and the outlook is said to be positive as the company is "well positioned from the recent federal budget" which saw a further road spending allocation of $2.3bn.

This has pushed up Austock’s valuation of the company by 11%, with their target now set at $0.42.

GRI supplies and installs steel guard rope rails and barriers along the Australian eastern seaboard, while TTI takes care of signage, traffic management solutions, signals and hardware and asset management.

The stock is currently trading at 27.5c.

By Terry Hughes

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