Yes @Ahf1995, I agree ACF is undervalued. Based on the current price and upgrade, it is on a FY23 P/E of around 7. This is ridiculous for a > $200M market cap company that has grown its EPS at a compound growth rate of over 40% p.a. for the last 3 years, with no sign of slowing down. EPS has tripled in 3 years from around 3.7c in FY20 (the year covid hit) to around 11c in FY23. Dividends have more than doubled in the same time.
This is also a much higher quality company now than 3 years ago, with ROIC now around the 25% mark (was 11% then), with the added bonus of much greater size (now > $200M compared with $68M 3 years ago), much greater geographical diversity and many more areas of expertise/services. Given all of this, I consider a P/E of 14 would still be cheap. That would represent a doubling in share price just due to P/E expansion.
ACF Price at posting:
78.5¢ Sentiment: Buy Disclosure: Held
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