In crunching the numbers and assuming FRM at the very least replicate the 1H16 EBITDA of ~$8m in 2H16 (as per prior years), implies FY16F EBITDA of $16m. After deducting Int Costs, Tax and Cap Ex, FRM will be looking at FCF of +$11m in FY16F (or 20cps). The question then becomes, what is the correct FCF yield for this buisness ... at a FCF yield of 10% = price target $2/share, at 7.5% FCF yield = $2.60/share, at 5% FCF yield = $3.90/share. I will let you guys choose the appropriate FCF yield .... but what this shows is that FRM still looks very cheap!!
FRM Price at posting:
$1.73 Sentiment: Buy Disclosure: Held
