Your right it could be cyclical conditions in which case all I have modelled is the business through the tough part of the cycle (they haven't been listed that long so thats all I have to go by). That should still be factored into valuation - for 40x earnings I want a business with a very long runway of uninterrupted organic growth where the outcome is 100% within the control of management rather than dependant on things outside their control (like the share price staying high). I think at the current valuation I can afford to wait until I see real organic growth emerge in the numbers.
I dont disagree that the roll-ups can keep going either. They have less than 1% market share in the US so they aren't going to run out of targets anytime soon. The risk is more if they hit any type of speed bump (the Asian business possibly) which in affects the stock price which in turn closes the door on cheap equity which in turn stops them growing which in turn causes them to trade ex-growth if this makes sense.
CTD Price at posting:
$22.05 Sentiment: Sell Disclosure: Not Held
(20min delay)
