yes if it makes $0.675 in 2024, $30 is a very good buy today....

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chad987

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14/01/22

20:42

Post #: 58878974
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Originally posted by Plague: ↑

PME is around 1% of my portfolio, I want to get it to 5-6%. Premium companies deserve a premium, 100% gross margins of which 45% goes to the bottom line, high rates of organic growth, clean balance sheet, co-owners highly aligned (26% of capital each), 39% return on capital. The economics of this business are eye-watering but so is the valuation.

Strong history of increasing revenues especially recurring revenue with even further upside depending on transactions. 62m cash, no debt.

What does the future look like?

Much of the same quality organic growth. Getting the software into universities and medical training facilities is a masterstroke so that new graduates are trained and comfortable with the platform (Network effect).

What's it worth?

Analysts expect EPS of 0.675 in 2024, current share price of 46.70 implies a forward p/e of 69.17. Premium companies deserve a premium but a 70 multiple is very high. Around 45 is more attractive if interest rates do rise which would imply a share price of $30.37.

Very interested to get others thoughts, i've always been better at finding great businesses rather than calculating (or guessing) their intrinsic value although i've found it is always better to buy shares in a company with a intrinsic value that is increasing rather than buying a deep discount that's a melting ice cube and slowly erasing value.

Cheers,
Plague.

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yes if it makes $0.675 in 2024, $30 is a very good buy today. it's worth quite a bit more if it can sustain this 30% cagr for many years, but my experience is make conservative growth estimates.

Last edited by chad987: 14/01/22

PME Price at posting: $46.59 Sentiment: None Disclosure: Not Held
4 Upvote

0 Great analysis

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