In terms of the best mechanism by which to return capital (dividends or buybacks), given the low capital intensity of the business and with a capital return from PEXA pending, they could afford to do both.
I have gone hard on this investment.
Conviction level very high due to deep under-valuation.
By my reckoning, if a truer value for LNK's stake in PEXA is stripped out - say $1.0bn, instead of the current ~$700m carrying value - then I'm buying the $360m to $380m of EBITDA that is represented by all the other businesses for less than 4x EV/EBITDA.
Viewed from the opposite direction: if I apply a modest 8x EV/EBITDA multiple to the other businesses, then the PEXA stake is implicitly being valued at a negative$500m (!!)
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LNK Price at posting:
$4.10 Sentiment: Buy Disclosure: Held
