MTO is an interesting case.
The stock is cheap with a free cash flow yield 20 of 18 % (after removing the effect of Covid) when the stock was at 1.94 $.
However, it may be justified as the company was ex.growth before Covid (regular decrease for the new motors market since 2017).
Not sure if the stock justifies a significant re-rating like most of the retailers and e-commerce, which should benefit from less net store openings and the regular growth of e-commerce.
The re-rating would be justified by a new dynamic for the motorbike market. However, I do not see at this stage which could justify it.
Anyway, the stock probably deserves a higher valuation (vs pre-covid) as this rebound of their business (even if temporary) enables the company to strongly improve its financial situation. In FY 20, they had a free cash flow of 34 m (FY 21 is also expected to remain high) which is significant for a company with a market cap of 145 m.
Ann: Profit Guidance, page-4
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Last
$1.26 |
Change
0.045(3.70%) |
Mkt cap ! $92.99M | |||
| Open | High | Low | Value | Volume |
| $1.24 | $1.26 | $1.24 | $45.32K | 36.24K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 2939 | $1.26 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $1.30 | 45521 | 1 |
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| Last trade - 16.10pm 16/08/2024 (20 minute delay) ? |
| MTO (ASX) Chart |