More likely a value trap, was a holder at $1 a few years ago sold out when I realised there wasnt going to be any return to equity holders I bought into a time when this cyclical play was at the peak of its cycle, initially looked really appealing, no debt FCF of $10mill then the cycle started to contract and we know the rest of the story from there
What really killed it for me was when they announced their acquisition of an egg production facility that was going into liquidation ( a Victorian one if i recall correctly) and when they released their results after it they ended up booking goodwill on the transaction instead of a gain on purchase indicating they paid above the Fair Value of Net Assets which to me didnt seem like a bargain purchase if you are shopping at a fire sale auction.
Effectively the company wont ever make more than its cost of capital/reinvestment rate and will be stuck between loading up debt and paying it off while never distributing money to shareholders with a steady state level of cash flows as they are simply unable to. Hence there is really no return to be made.
Also worth mentioning management have not impressed me at all, they treat being a listed company more as a chore, one small indicator is their habit of issuing their annual report after market close on the final day of reporting season without fail
FRM Price at posting:
19.0¢ Sentiment: Sell Disclosure: Not Held
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