A fair PE ratio for the MaxiPARTs business would be 12 (at this stage don't think it can be compared to SNL, BAP or GUD)
The business has to prove itself
There has only been a little revenue growth over the last 4 years
Bushfires and COVID may have negatively impacted revenue
Agriculture has been generally buoyant
But construction and infrastructure has been strong
Although margins have been improving
Management are the same and have struggled with the trailer business - a parts business is much simpler so maybe a stronger focus will get a better result
New buyer of the trailer business is only tied to MaxiPARTs for 3 years
Share price (pre consolidation) = 4.7 X 12 = $0.56
Add in the special dividend of 12.5cps
Which gives a value of 68.5cents = today's price. IMHO it appears to fairly priced
21M shares changed hands in the 5 days after the announcement in the 60c to 70c range so they are seeing value.
What am I missing?
MXI Price at posting:
68.5¢ Sentiment: None Disclosure: Not Held
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