Hi i bought in at 7.55. My rationale is the following1. Track...

Hi i bought in at 7.55. My rationale is the following

1. Track record : last 5 years of stable and > 20 ROE
2. Management has skin in the game : tudehopes
3. P/s ratio at less than 0.75. I give this underused metric a lot of value ( fischer) especially if the company will grow in the future ( not to be used when revenue is dropping for obvious reasons)
4. ROE and EV/EBITDA comparison. Amongst the best in ASX ROE of 26 and EV/EBITDA of < 4 . Have a look and you will be hard pressed find that combination ( this is a variation greenblatts method)
5. DCF valuation : earnings are expected to grow by 10-15 percent over next two years . Undervalued assuming no growth after 2 years and using EPS of 0.75 per share current at 11pcnt discount rate . Margin of safety ( as per my definition) exists
6. P/ CFlow is around 4.5 which is excellent ( anything below 10 is considered good)
6. ROE valuation at payout ratio of 20 pcnt provides a goodmargin of safety
7. P/E ratio also satisfactory
Cant provide advice about long term or short term but the above might help with your decision.