Ann: 2020 AGM Presentation, page-98

Not sure if I would be the best person to ask.

And I am sure the best answer will be something along the lines of "it depends on the sector" and or "it depends on the stage of the business in its life cycle" and or "it depends on the stage of the cycle". I know that there are some quant funds out there that specifically look for deep value and use EV:EBITDA as a metric; and it seems there are people who screen for it specifically when looking to identify potential stocks. Though I am not sure what thresholds would be used. Arguably, anything less than 10 provides limited downside risk for a company that's not shrinking. The risk of using EV:EBITDA is that it could be a value trap. Look at Telstra (currently EV:EBITDA around 11) or AGL (6), these business may have appealing earnings relative to enterprise value today, but their earnings may continue to deteriorate. The higher the EV:EBITDA, the higher the price you are paying for growth essentially.

And thus why I like the ratio for Tassals though. At around 10 at the moment, it is considered relatively low not just in the food / agriculture sector (Inghams 17, Huon 12, Coca Cola Amatil 14, Bega Cheese 19), but also historically when measured against Tassals itself. And looking at those names, none of them I think have as good a growth potential as Tassals (maybe Bega considering what's going on there at the moment?) nor as historically stable revenue growth.

Always remember, do your own research.