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23.5¢ prt company limited

Trading update for previous months broadcast, page-5

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Autosime

15,774 Posts.

268

26/04/18

14:24

Post #: 32696221
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Originally posted by Autosime ↑

This is how I see it . The stock trades at a PE of 4 ish . Even if profitability was to drop 35-40% with the new agreement, that would make it a PE of 7 . Now if they had high debt and given the declining revenue then one would argue this makes sense , but by June 19 there is No chance they will have debt and should be net cash by 5-10 IMO so you would expect a PE of 9. I would expect cash flow around 28-30 to end of Dec and then another 10-14 for the first 6 months . Given debt clearance is priority over dividend then debt will be gone by Dec but FEb the latest That gives 4-6 months of cash build

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The other point is that Spheria and Pinnacle are two of the best small cap managers in Australia so one has to place some faith in their stock picking skills, specifically given the affiliation agreement renewal is a known fact

PRT Price at posting: 28.0¢ Sentiment: Buy Disclosure: Held
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