A Growing Business Priced Below Liquidation Value

Plus a $70M operating business and $19M in net-cash thrown in for free.

Today’s business has a market cap of roughly $30M and an enterprise value of roughly $13M USD.

Last year it generated around $7.5M in FCF.

The tangible book value is almost $70M and it has net-cash of roughly $19M.

Over the last 5 years, the average amount of FCF per year has been around $2.8M.

The business model is very stable.

Revenues have grown from around $57M per year in 2018 to over $70M today.

Operating cashflows and FCF has also grown steadily over the same period, and both hit all time highs last year.

Here are the valuation metrics:

NCAV Ratio = 1.4

TBV Ratio = 0.45

EV/5Y FCF Ratio = 4.5

P/5Y FCF Ratio = 11

P/FCF Ratio = 4

The business has consistently paid a regular dividend and continues to do so.

The NCAV ratio also points to a business that is highly liquid. 87% of current assets are cash and invoices.

Right now, the business is priced at half its liquidation value, which seems absurd for such a reliable cash-machine that has been plodding along for over 70 years.

When I dug into the r…