The CTD business model sees buying businesses that have inefficient processing systems, ie largely manual. These businesses have good levels of TTV but a low conversion of TTV to EBITDA. CTD then applies its IT tech systems and culture to improve these margins materially. Also CTD because of its profits and high margins traditionally trades at a high PE, high SP. The businesses it buys trade at much lower PE ratio's. CTD issues a few shares at an elevated high PE, high share price and pays for the low PE, comparitive low price business with these $$. CTD then goes about improving the business margins. Paying with inflated high PE $ for high TTV /low margin has worked a treat so far. The business travel industry has been comparatively fragmented so there are plenty of opportunities.
CTD Price at posting:
$21.28 Sentiment: Buy Disclosure: Held
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