ALS taking no risks, but market on the fence

afr.com:

The advertisement for businesses looking to test beauty-care products is catchy: young adults leaping into a pool under the banner “risk takers need not apply”.

The testing is among services offered by ALS, a $5.6 billion laboratory services giant. There’s everything from shelf-life analysis to potential skin-irritation checks (the division says it has “never performed any type of animal testing”).

Testing for the life sciences industry is an area of expansion for ALS. Nicolas Walker

This increasing work in cosmetic and pharmaceutical markets is part of changes for ALS, which started life as a soap factory in Kangaroo Point in the fledging colony of Brisbane in 1863 under Scottish migrant Peter Morrison Campbell.

Its growth to a 19,000-employee global business included becoming a seller of goods such as Fluffy laundry powder and hospitality supplies, but by the 2010s the company was paring down divisions to focus on testing.

And, while ALS’s wagon was hitched to the mining-sector star, becoming a major global commodities tester, long term the company has been expanding more into life sciences work.

For bulls, there’s hope this life sciences expansion means more stable earnings, and the mining slowdown is shallow. For bears, potential threats include the commodities cycle slumping heavily, hiccups striking life sciences work, or even botched integrations, given the company constantly acquires rivals.

So while the advertisement says risk takers need not apply, ALS stock might still require a leap of faith.

If ALS follows its typical path, shareholders can expect an earnings update on Wednesday at its annual general meeting at Brisbane’s Westin Hotel.

It will be the first meeting under new chief executive Malcolm Deane, a