You're right.It would be more cautious to look at a PE based on...

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saintex

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27/08/24

14:42

Post #: 75396677
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Originally posted by madamswer: ↑

"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.)

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You're right.
It would be more cautious to look at a PE based on a normal tax rate.
At the same time, they still have a significant level of tax loss carry forward (tax losses not recognised of 4.3 m$ at the end of FY 24).
So they are not going to pay a normal tax rate before FY 26.
This absence of tax is also helping a bit their cash flow.

MYG Price at posting: 74.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)
Last 75.0¢		Change 0.015(2.04%)		Mkt cap ! $68.60M

Open	High	Low	Value	Volume
74.0¢	75.0¢	74.0¢	$566	755

Buyers (Bids)

No.	Vol.	Price($)
1	1351	74.0¢

Sellers (Offers)

Price($)	Vol.	No.
77.0¢	23000	1

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No.	Vol.	Price($)
1	1351	0.740
1	4281	0.735
1	5000	0.710
1	3000	0.705
1	1400	0.700

Price($)	Vol.	No.
0.770	23000	1
0.805	3531	1
0.810	10675	1
0.820	5933	1
0.830	8059	1

Last trade - 13.48pm 03/10/2024 (20 minute delay)

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