It's times like these where it's good to re-visit my initial...

It's times like these where it's good to re-visit my initial investment thesis from March 2020 when I first bought this stock.

The beauty about the COVID recession is, it allows us to use the financial results from that year to indicate the resilience of companies in the wake of a downturn in economic trends, should this occur as some economists are predicting.

With this in mind, I noted that NZME produced FCF of $41m in 2020 but of course, this includes $8.3m of Jobkeeper wage subsidies so stripping this out would leave us with circa $33m FCF. (still quite decent imo given most businesses would struggle to produce any FCF in the wake of a recession)

Assuming NO GROWTH, one could safely apply a multiple of 10x to this figure which should give us an EV of $330m, much higher than the current SP.

Again, this is me projecting a doomsday scenario to fairly estimate what the intrinsic value of NZME is against the dark clouds currently dragging the SP back. If management are still able to grow their FY23 margins as they expect to next year, the intrinsic value will be north of $400m+.

* I have however noted through some background research there's been a drop in website traffic to NZ Herald and the lower property market would certainly not be helping OneRoof from a valuation perspective.