EAS generated $2.2m operating cashflows in FY19. So if the EV was $40m (I don't have the numbers on me but will take your word on it) this would be a FCF yield of 5.5% prior to any organic growth (which is plentiful) or adding the earnings contribution for the recent acquisition (the capital base of which is being included in the denominator of this equation). So in relation to the comments that EAS generates "almost no cash", I would politely disagree & refer you to those FY19 cashflow statements.
I'll also just point out that buybacks have accounted for about $24k (yes, "$k" of capital allocation thus far. I'm very sorry but it's just plain preposterous to assert this "inflates the share price".
Finally, if you could please kindly point out those private businesses (presumably with comparable competitive positions & growth potential, hence the comparison being drawn) that one could purchase for $40m that would then return 20% pa CASHFLOW on investment, I'm confident I could find a consortium of private capital to buy them out. To be clear, this isn't a boastful remark about my dealmaking abilities (infact, I've never made a deal in my life, and am probably somehow an anomaly of being within 6 degrees of separation of anybody who has). Rather, compiling equity for such an investment could probably be achieved by a few Facebook posts.
EAS Price at posting:
73.0¢ Sentiment: Buy Disclosure: Held
of capital allocation thus far. I'm very sorry but it's just plain preposterous to assert this "inflates the share price".
