A Growing Market-Leader Priced at 3.8x FCF

Also buying back stock and holding more cash than market cap.

Peter Lynch once wrote:

“If you stay half-alert, you can pick the spectacular performers right from your place of business or the neighborhood shopping mall, long before Wall Street discovers them. This is where you’ll find the tenbaggers.”

I don’t believe today’s stock is necessarily a 10-bagger, but I do believe it has plenty of room to double within the next 2-3 years.

When I looked into it, it reminded me of the quote above.

This is because I first found this business as a customer. I was so impressed, I immediately checked out the stock.

To my great surprise, it was pretty cheap.

Here are the ratios:

TBV Ratio = 1.6

EV/5Y FCF Ratio = 1.5

P/5Y FCF Ratio = 6.7

The total shareholder yield last year, at today’s price was over 7% (1% dividends and 6% buybacks).

The company also started a new buyback programme in 2025, equivalent to around 10% of the current market cap.

Before we go any further it’s probably a good idea to clarify exactly what this situation is, and what it isn’t.

There is no margi…