SRF (ASX) Ann: Becoming a substantial holder from PPT,PPT-SRF.AX

Originally posted by Menza ↑

I've spent the morning reading through old posts, and I find it quite funny how in March punters were saying that a lowball offer of $1.20 might be on the cards. Here we are thinking a lowball offer is 50 to 60c!

Facts remain:

- This is a growth stock, so high EBITDA is not essential in the first few years
- They are acquiring and diversifying
- SRF looks like a modern integrated retail stock, with excellent online presence
- They have millions of online followers
- 60% of sales are from overseas, allowing for all year weather patterns
- AUD trending lower should benefit the margins
- Online presense is helping lower staff and fixed costs margins
- They sell winter gear for the snow as well as summer gear, and media assets are exciting
- Continual trends to outdoor, fitness and active clothing. Surfwear has survived for years
- The company has around $35m in cash once payables are made
- Intangibles are under control and haven't blown out
- There is no debt, which leaves room for further expansion
- Tidy balance sheet
- High revenue growth
- The Alexa.com site traffic may not be accurate, and either way Feb to June isn't winter or summer
- There is a high chance that private equity or the founder will make a play for this company

If the obviously determined seller continues to put fear into the share price, then so be it. They can keep trying to bring the share price down, but fundamentally this stock is already oversold. I really don't think this will get to 20c. That's a market cap of $55m - almost cash backing. I still have a little faith that the market will adjust and buyers will come in before it even gets to 20c.

It's up to the individual investor to decide what the real value is in this company.

Personally I think with a 5 year target of $1bn in revenue, a market cap of sub $120m will not suffice. I think the brand is relevant, expanding and exciting given the modern aspect of having such a broad online presence.

It's evident that there is at least a 50% uplift in share price from here onwards. If only investors could look a little further into the future!

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You are unbelievable. I can direct you to a post of yours that states in your words that this is 'going to 20c'.

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