I'm not highly confident - it's a 2% position for me currently. I'm making what I think are some obvious, factual observations:
1) GTK now is selling at close its cheapest EV/revenue multiple since it listed (it was when I looked at the Bloomberg terminal last week). 2) The quality of that revenue (ie extent to which it is recurring rather than lumpy project revenue, number of customers, diversity of products) is clearly the highest it's ever been in the company's existence. 3) The upshot of (1) and (2) means, in my mind, that GTK today is as good or better value than it has been throughout its 5-year listed life. 4) If the UK bounces back, revenue will grow into the expanded cost base, margins will track back up toward 30%. 5) If the UK doesn't bounce back, they'll retrench a bunch of people to restore EBITDA margins back to high 20s.
GTK Price at posting:
$3.55 Sentiment: Buy Disclosure: Held
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