ACF - Always Count on Framework, page-6

At the risk of preaching to an empty auditorium, as there seems to be little interest in ACF on Hot Copper, here are my thoughts (I will be more likely to share views and analysis in future if readers give some feedback with some GA's and likes so I know there are some out there that are interested).

I cannot believe the value/quality proposition of ACF. Even though I keep my own valuation spreadsheet, I had a look today at a very recent analyst report by Bell Potter. Here's some of the key data from BP:

FY21:

• Underlying NPAT of $9.2M (I am a bit more optimistic at $9.8M following recent upgrade announcements);
• P/E underlying of 9.1;
• ROE 15.1%;
• Dividend Yield 4.6%; FCF Yield 9.8%
• EV/EBITDA 4.1x;
• EBIT growth 29.9%;

FY22 & FY23:

• Suffice it to say that BP has underlying EPS growth of 28.9% for FY22 and then 13.4% for FY23, leading to:
• Underlying P/E ratios of 7.0 in FY22 and 6.2 in FY23, and
• a FCF yield of 15.5% in FY22 and 19.9% in FY23 (think about this - which ASX companies can offer this kind of cash flow return while growing at high double digits for the next 2 years).

I could go on and on, but IMO the bottom line here is that ACF is already very profitable, has restructured to greatly improve its business model and customer offer, is growing at double digits in a market which looks very strong for several years to come. Normally, IMO a company such as this would command a P/E of > 12.0, and if a larger more liquid company, a P/E of >15. Yet at current prices it looks to be on a FY22 P/E of 7.0. This indicates to me that if all continues to go well, better market recognition and a P/E of 12 by June 22 would support a share price of 64.3c, or around 70% higher. Don't forget the accompanying FF yield of 15%-20%.