BSA is looking very good IMO. The market has massively over reacted to the loss of the telstra contract, which, at worst, is likely to result in a flat FY09. But given that FY08 is conservatively expected to generate a NPAT of $12mill, a flat FY09 still means a profit in the region of $12-13mill. Based on these conservative numbers, BSA is currently trading on a FY08 earnings multiple of just 7.5 (FY09 7.4). In this market, and given BSA's strong cash flow and balance sheet (minimal debt, despite the recent Triple M acquisition), a forward earnings multiple of 15 is easily justified. On this basis, I see plenty of room for a 100% gain for the this stock over the medium term (roughly, the next six months).
BSA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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