BWX is a screaming buy from here, page-20

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r0k1758

6 Posts.

07/01/19

15:22

Post #: 37046198
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Originally posted by Icahn: ↑

As I said when I first posted my thesis, on a company capped at $180m, it was too small / illiquid for the hedge funds to maintain their short position. A reduction in short interest from 13% to 11.78% over the last 1.5 weeks has resulted in the price jumping +15% (has been helped by the market rebound too!). Expect this to continue given the expensive borrow on the stock + continual positive sentiment.

I've got +80% upside from here - I get to it by the company hitting the mid-point of FY19e EBITDA guidance of $29.5M, putting it on a multiple of 14x FY19e EBITDA (this multiple was the lower bound over the past 3 years) which gets you to an EV $413m! If you're a bull, you can take the FY19e EBITDA top guidance of £32m, and put this on a multiple of 18x (previous highest multiple was 22x 1yr-fwd EBITDA), which gets you to +150% upside.

Happy hunting.

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Do you really think the EBITDA target of 29.5M is realistic considering the 7M 1H19 projected results? You're implying a ~76% skew to 2H19 earnings which is very optimistic in our depressed economic cycle.

It seems that the stock is fairly cheap but maybe that's because of the massive amount of execution risk?

BWX Price at posting: $1.52 Sentiment: Hold Disclosure: Not Held
2 Upvote

0 Great analysis

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BWX is a screaming buy from here, page-20

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