Low risk IPO entry, page-2

First 2 Last

Share
Profile

Follow
stillade

1,453 Posts.

13

08/06/16

20:44

Post #: 17988728
Share

Originally posted by 5hareholder ↑

I've reviewed the numbers and bought a few today - not fully convinced yet (looking at the CFO's track record with small caps especially) but its a far better bet than a lot of the other recent IPOs.

Here's what I like.

Market cap is currently ~$15M.

SW1 currently service 29,000 rooms, generating ~$450 per room per annum, with an EBITDA margin of 20%. So steady state EBITDA is in the realm of $2.6M. Every room essentially creates $90 for the bottom line EBITDA.

SW1 have just announced an uptake of 19,000 extra rooms, boosting bottom line EBITDA by $1.7M by 2018 with this one contract alone. So this demonstrates to me that they're ready and capable to grow.

SW1 are pushing for international growth of 44,000 rooms this year, more than doubling the current room quota. If they can sustain current margins and can deliver on this growth, EBITDA could easily grow to >$6M within 12 months.

Fair value for this should be approximately 6x EBITDA, implying the following valuations...

$2.6M EBITDA (position at IPO) - 19c per share
$4.3M EBITDA (position as of now) - 31c per share
$6.0M EBITDA (based on calendar year target) - 44c per share
$10M EBITDA - 73c per share

If we really want to simplify it, I believe its worth 1c per share for every 1,500 rooms on the books.

So right now its priced for no growth whatsoever. This is a punt, sure, but its a cheap punt. If they keep on announcing contracts this will fly.

Expand

Thank you. I was waiting for someone to do the numbers. Just reinforces my view that this in a much MUCH lower risk bet that the others out there with even better upside. GO SW1!!!!

SW1 Price at posting: 18.5¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

Reply

Top Stories

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

CXM

'Taking money from the market': Garbage giant cleans up as this week's Hot Stock tip

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

ACW

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

There are more pages in this discussion • 43 more messages in this thread...

First 2 Last

Add SW1 (ASX) to my watchlist

(20min delay)
Last 0.9¢		Change -0.001(10.0%)		Mkt cap ! $9.810M

Open	High	Low	Value	Volume
1.0¢	1.0¢	0.9¢	$723	80.3K

Buyers (Bids)

No.	Vol.	Price($)
4	630361	0.9¢

Sellers (Offers)

Price($)	Vol.	No.
1.0¢	139843	1

View Market Depth

No.	Vol.	Price($)
1	199996	0.013
2	691666	0.012
1	226370	0.011
1	100000	0.010
1	120000	0.008

Price($)	Vol.	No.
0.016	531250	1
0.018	462860	1
0.019	1000000	1
0.020	218562	1
0.021	70000	1

Last trade - 16.10pm 26/11/2024 (20 minute delay)

SW1 (ASX) Chart

Low risk IPO entry, page-2

Top Stories

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

'Taking money from the market': Garbage giant cleans up as this week's Hot Stock tip

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

Buyers (Bids)

Sellers (Offers)