Far from the prettiest swan on the lake, but being priced by the market like it is the ugliest frog.
When, quality-wise, IVE Group is probably something in between a good business and a lemon.
Valuation metrics following today's update, according to my reckoning:
EV/EBITDA = 3.4x
EV/EBIT = 6.0x
P/E = 7.2x
DY = 9% (even at the bottom end of the targeted payout ratio)
(And the Net Debt part of the EV will be elevated due to the significant - and prudent, given what has occurred to the price of paper - investment they've made in raw material inventories.)
Will never be anywhere close to a market multiple business, but even at an undemanding 4.5x or 5.0x EV/EBITDA multiple (which would correspond to 8x EV/EBIT and ~10x P/E), that equates to more than 40% upside. To go with the mouth-watering 9% DY.
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IGL Price at posting:
$1.72 Sentiment: None Disclosure: Held
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