"did I really miss by wide margins? Bit unfair. But yes I cherry picked numbers to make my point. My cherry picking is junior league when compared to the presentations by the company."
Just about all management presentations gild the lily in trying to present their company in the best possible light, in manners ranging from mild embellishment to outright misrepresentation bordering on lying. Nothing remarkable about that; it has been ever thus.
Which is why I almost never even look at presentations... because I understand from whence they originate and why. Instead, I conduct my assessment using only information contained in the audited and annotated financial statements. My firm opinion is that anyone who takes his/her investing cues from glossy presentation slides without analysing the full set of financial accounts, should not be investing on their own behalf. They would be better served buying low-cost index funds
"the number that matters most is on page 15 of the investor presentation. npata. A growth rate of 19.5% may sound impressive but that still needs another 5 years at the same growth rate."
As I said, I didn't even look at the presentation, but 19.5% pa NPATA CAGR is also the figure I have derived from my spreadsheet (FY20 NPATA of $3.9m and FY24 NPATA of $8.0m).
But as I have been saying for months now, KPG is indeed unambiguously expensive, but if it keeps doing NPATA growth somewhere in the high teens for the next 5 years, without recourse to shareholders for capital, I doubt the P/E multiple would fall by much; maybe into the high-30x, but more likely low-40x, multiple, after which the annual investment returns will mathematically be equivalent to the NPATA growth, i.e., in the mid- to high teen percentages.
I think what happened is that, in the past 3 months, the stock price got ahead of itself by 12 to 18 months' worth of earnings growth. Which means it will have to now tread water for around 12 months as it waits for the earnings growth to play some catch up and chew down the multiple. As so often happens with rapidly growing stocks.
But it doesn't for one minute mean that the investment has ceased to exists.
Rather, it has merely been paused.
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