This does seem cheap, however I am concerned about the following:
- On average, $2.1m p.a was spent on property, plant & equipment from 2008 - 2015. In the last 3 years, they have spent $2.6m combined! Operating cash flow might come good soon but there is clearly a capex catch-up to be had of close to $4m...not withstanding the main kettle replacement they are having to pay for now which I suspect is a substantial cost. Free cash flow will be poor for a couple of years.
- $450k p.a remuneration package for non-exec directors is huge for a company of this size and complexity. A 6 person board, including 4 non-exec directors for a simple company with a mkt cap of $25m is excessive.
- $1.8m p.a for the key management team...yeesh. Most of them barely hold any shares either!
- The new CEO risk. You see this so often, new CEO comes in and cleans the deck. Writes down inventory & PPE then embarks on a nice capex spend to help with his performance related remuneration.
- Even though this is a cyclical company, I just do not think there is any material mean reversion to be had. My calculation of free cash flow over the past 10 years showed an average of $2.9m p.a. Say we expect this to be trading on 10 times FCF if/when FCF comes back to its 10 year mean, that's only a market cap of $29m. We are at $25m now.
I like these pokey little company's and I think this looks cheap but I do not think it is yet. Thoughts?
- Forums
- ASX - By Stock
- Ann: Chairman's Address to Shareholders
This does seem cheap, however I am concerned about the...
-
- There are more pages in this discussion • 2 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add KOV (ASX) to my watchlist
(20min delay)
|
|||||
Last
$10.20 |
Change
-0.020(0.20%) |
Mkt cap ! $119.8M |
Open | High | Low | Value | Volume |
$10.35 | $10.35 | $9.96 | $146.8K | 14.60K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 399 | $10.20 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$10.40 | 4754 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 399 | 10.200 |
1 | 201 | 9.960 |
1 | 2025 | 9.900 |
1 | 510 | 9.870 |
1 | 1015 | 9.840 |
Price($) | Vol. | No. |
---|---|---|
10.400 | 4754 | 1 |
10.500 | 8951 | 3 |
10.850 | 500 | 1 |
11.000 | 961 | 1 |
11.340 | 18 | 1 |
Last trade - 15.37pm 04/10/2024 (20 minute delay) ? |
Featured News
KOV (ASX) Chart |