"Based on FY 24 figures and a share price of 80c, the stock has a PE 24 of 14.4 and a free cash flow yield of 9.6 % (if we look at the free cash flow of 5.5 m$, excluding the favourable impact of working capital)."
Hmmm, I think it's very libertine to capitalise EPS which have been boosted by a tax benefit. Far more reasonable, I feel, to exclude the tax benefit. Or, as a matter of prudence, my preference would be to use EPS after the application of a notional tax expense, in which case trailing EPS becomes something like 3.7cps, implying a P/E multiple of around 21x.
But in this company's case, there is a very large discrepancy between accountingprofits (per the P&L) and cashprofits (per the Cash Flow Statement), implying that the P&L probably understates the earnings capacity of the company, so I do think that using FCF multiples (or FCF yields) presents the truer valuation picture.
(Why there is such a discrepancy between the P&L and the Cash Flow Statement I've not had chance to figure out, but at some point when I have some spare time, I'll conduct the reconciliation exercise to discern how the company and its auditors account for profits and expenses.)
MYG Price at posting:
77.0¢ Sentiment: None Disclosure: Held
