@hfrench, given the policy uncertainties, LGC prices and IFN's...

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24/12/18

11:17

Post #: 36950719
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Originally posted by hfrench: ↑

My thoughts are that IFN is heading down towards being good value but hasn't quite got there yet. If I held I wouldn't be selling.

With regard to your numbers, EBITDA has to be used with some caution because, as the acronym suggests, it omits interest (which the company certainly has to pay on its $500m net debt), tax (which it'll have to pay once it's chewed through its deferred losses), depreciation and amortisation (which reflect that businesses have to invest simply to stand still - and a few of IFN's wind farms have just ticked over 50% of their serviceable lives).

Enterprise value, ie market capitalisation+ net debt, is still over $900m which puts trailing EV/EBITDA at around 6. That seems cheap but as I mentioned in another post, forward earnings are very difficult to forecast due to the large proportion coming from LGC sales. IFN has done well to chip at its debt (really they had no other option) but its assets would naturally fit better in the hands of a larger player .

I hope to buy this if it gets considerably cheaper, then wait for the inevitable sale or takeover.

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@hfrench, given the policy uncertainties, LGC prices and IFN's debt, what price fits your criteria of "considerably cheaper"?

On a valuation perspective, even using very conservative forward looking assumptions, I think that IFN looks cheap below 40 cents. @anticyclical

PE ratio of less than 10.

EV/EBITDA ratio less than 7.

Price to sales ratio less than 2.

Personally, I am considering accumulating below 40 cents. @strangelogic

GLTAH. DYOR.

IFN Price at posting: 42.0¢ Sentiment: Buy Disclosure: Held
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@hfrench, given the policy uncertainties, LGC prices and IFN's...

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