Have been overweight BFG for around 4yrs since 60c and have...

Have been overweight BFG for around 4yrs since 60c and have always been amazed how ignored it is by the market and trades on a far discounted P/E to sector peers despite a stellar >5 year growth record compared to often stagnant peers.

the ROIC has been great and the divi’s >10% with franking..

I have order to buy a few more at 1.81 given the lack of bounce with the result.... as they say “water your winners”.

the main triggers coming up to a re rate over time will be:
- strong guidance at their presentation in feb and an increased divi
- continued cost savings and revenue growth from their recent strategies to keep flowing through (see recent presentations for details of each of these)
- small cap funds buying up based on fundamentals for value and growth and yield
- broader coverage of bfg by brokers over time as market cap expands and track record too
- individual investors hungry for the huge yield
- increased liquidity as market cap expands
- inclusion in asx300 then possibly even 200 in next couple of years which would allow more fund managers to then invest
- bfg will be looking for how to manage their cash given they have no debt, so the two options will be (1) acquisitions and (2) a share buyback on market; either would drive the sp higher
- conversely , bfg could actually be a takeover target themselves for a bigger fund manager or someone like Macquarie due to their rich IP in software / broking/ research platforms which they have developed but bigger inv banks would love to own; they also have >60b FUM which could be absorbed and thus eps accretive

I expect 2.00 over the next few months barring a major broader market pullback of course( 2.00 is Morningstar’s present fair value estimate even prior to today’s result, so will go up to probably 2.20 now)

but I won’t be selling a single share. I still plan to hold for a further 5 years and expect the 200% CG + almost another 100% divi return thus far to keep growing