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We can buy today’s business for around $800m.

It owns $2.52b of inventory, $348m of cash, and generates roughly $100m of average annual Owner-FCF.

But that’s not why I find the set up interesting.

If I bought this business whole, I would focus on extracting excess cash and then operating the remaining business.

After running the numbers through my big-buttoned calculator, it looks like there is around $300m in extractable cash hiding in the balance sheet.

That would leave me with an effective cost of around $500m.

I’d also be left with a business still capable of generating roughly $100m of average annual Owner-FCF.

This is nice, because we’d get paid back in around 5 years and keep everything else for free.

Management is also building a capital-light asset-management business that already manages $3.4b and generates recurring fees using mostly other people’s money.

This is one of those free things we’d get thrown in.

I’m assuming no growth from it whatsoever.

I never do.

The existing assets and earnings are enough.

Anything that happens with the future business is purely the cherry on the cake.

Let’s take a look...

Deep-Value Stocks

A US Net-Net Business for 5x FCF

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