a ferrari cruising in 3rd

There could be many reasons for this current share price depression although instead of speculating far better to simply look at the facts and then decide if the current earnings yield offers value, whilst also considering the company's growth prospects.

Perhaps the most illustrative slide (11) in the recent AGM presentation was the one which gave an update on the first 4 months of REL's trading conditions for this FY compared to last FY.

Here are the facts, revenue growth is 45% greater this FY than last FY. EBITDA is 50% ahead of last year and PBT is 40% ahead of last year. Another fact is that only 65% of equipment is currently being utilised and management is expecting a significant uplift in the utilisation rate of this equipment in the 2nd half. This is not surprising considering the wet season effects their two main markets, WA and Queensland during this time.

The current earnings yield is just over 16% based on last years EPS which is not bad for what is perhaps Australia's most dynamic and ingenious small cap company. A company which offers a necessary service regardless of price fluctuations in the commodity market and which has a wealth of growth opportunities ahead which it is currently capitalising on.