This presentation is a good opportunity to look at KPG valuation. KPG may look expensive with a trailing PE of 37.5 x. However, I find more interesting to look at KPG based on its free cash flow yield (corrected for minority interests). Based on this element (what the company calls "owners' earnings-parent (approximatively 51 % of total consolidated), KPG has a free cash flow yield of 5 %, based on H1 2021 results (annualised). Looking at their target for FY 24, their free cash flow yield is more around 7.6 %.
KPG is a rare case where the company has, at the same time : - a high visibility on its cash flow and free cash flow, due to the nature of its business (recurring, with low level of Capex required), - while they also find a lot of opportunities to reinvest its cash flow thanks to a large number of acquisition opportunities.
KPG Price at posting:
$3.38 Sentiment: Hold Disclosure: Held
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(20min delay)