That's exactly the way I view this investment opportunity. Not a...

First 258 Last

Share
Profile

Follow
madamswer

7,936 Posts.

1554

11/02/19

16:13

Post #: 37400639
Share

Originally posted by Transversal ↑

Originally posted by thunderhead1
@Transversal - I realise now that you have atleast partially answered my questions in the post above. I only caught up with all the posts since I last visited this forum, so my apologies.

Thank you @madamswer for your detailed view on the company, and welcome back to the register!
No worries.

This is a medium-term deleveraging play for me, i.e. a challenged but still FCF-generative enterprise that can materially enhance the value of its equity by paying down its debt. I started buying in October, not far from today’s price, therefore my investment rationale is probably different from the one of an existing long-term holder.

If the Company’s turnaround is successful, evidence of deleveraging should transpire by the end of FY20 (i.e. approx. 18 months from today); that is my investment horizon, unless the price/value gap closes earlier or the turnaround fails.

In terms of exit price target, if you assume a reduction in Net Debt down to ~30.0m$ (which looks conservative to me) and a stable EBITDA of ~22.5m$, then a 7.0x EV/EBITDA multiple would value the equity at 7.0*22.5m$ - 30.0m$ = 127.5m$, or 63.5c/share.

Any improvement in copyright costs, further cost savings, growth in Asia, etc. could possibly make me want to hold for longer.

Hope this helps.

Expand

That's exactly the way I view this investment opportunity.

Not a thing of any particular beauty but so cheap that nothing needs to go all that right for the Enterprise Value to be rapidly re-equitised.

ISD Price at posting: 30.5¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

Reply

Top Stories

LYN

InhaleRX gains approval for clinical trial to test non-opioid therapy for cancer pain

ME1

Banshee's historic trenches prove rich in antimony and gold for GDM

Week 46 Wrap: Copper hits 2mth low as Trump threatens net zero pace; US rally fades; HotCopper’s picks

HotCopper Highlights: Your most watched stocks for Week 46, 2024

AUN

Cyclone signs MOU with Vale for development of Iron Bear play

EDE

NT Gov't delivers environmental approval for Empire Energy's Beetaloo Carpentaria pilot gas play

BNL

Blue Star Helium sees approval for five more wells at 'Galactica/Pegasus' project in Colorado

BTH

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

AN1

CuFe sells its Crossroads gold royalty to Northern Star for $4M cash; says better than waiting for mine launch

GRL

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

There are more pages in this discussion • 50 more messages in this thread...

First 258 Last

Add ISD (ASX) to my watchlist

That's exactly the way I view this investment opportunity. Not a...

Top Stories

InhaleRX gains approval for clinical trial to test non-opioid therapy for cancer pain

Banshee's historic trenches prove rich in antimony and gold for GDM

Week 46 Wrap: Copper hits 2mth low as Trump threatens net zero pace; US rally fades; HotCopper’s picks

HotCopper Highlights: Your most watched stocks for Week 46, 2024

Cyclone signs MOU with Vale for development of Iron Bear play

NT Gov't delivers environmental approval for Empire Energy's Beetaloo Carpentaria pilot gas play

Blue Star Helium sees approval for five more wells at 'Galactica/Pegasus' project in Colorado

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

CuFe sells its Crossroads gold royalty to Northern Star for $4M cash; says better than waiting for mine launch

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels