Yes, make no mistake; for some time the news has not been good...

Yes, make no mistake; for some time the news has not been good for MVF.

But it "feels" to me like it is at, or close to, the zone of maximum pessimism. (I tend to like it when there is so much negativity around a stock/sector.)

Certainly, the stock's P/E multiple of ~13x isn't pricing in very much in the way of good news, or even "less bad" news for that matter.

Of course, there is the risk that it is a bit of a value trap, so that even if the business has indeed now found a base, this will only become clear in 9 or 12 months' time, meaning an investment in MVF could be "dead money" between now and then (aside from the ~5% investment return in the form of dividends).

But with the stock trading on a Free Cash Flow yield of ~8% [*], it strikes me that there is currently a reasonable degree of fundamental valuation support.


[*] Derived as follows (FY2020 prospective figures):

EBITDA = $35m
Less: Interest Payments = $4m
Less: Tax Payments = $7.0m

=> Operating Cash Flow = $24m
Less: Stay-in-business capex = $4m

=> Free Cash Flow = ~$20m, on an Equity Value of $250m, so ~8% FCF Yield.

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