Dooms day value in FLT

As a worst case scenario, we can possibly see the value in FLT in terms of 'option value'. That is, the value in participating in recapitalising the business. The business, up to Dec 2019, was running with annual expenses of about $2760m (SG&A) - about $27 per share. Even if we very conservatively (doomsday like) assume that the business will have ZERO revenue for the next 12 months, and even if we assume that NO COST CUTTING occurs, then we could say that a capital injection of $2760m will allow FLT to keep all it's staff, and keep the lights on, and keep ALL their landlords happy, and let them spend all their time at the beach - FOR A FULL 12 MONTHS.

I will ignore current liabilities, as I am ignoring the surplus cash position as at Dec 2019 (again, a conservative assumption).

I hope we can all see the extreme nature of the conservatism, in the above.

Then we can say that at the current price ($11 per share, and falling), we are paying $11 to let someone else offload their shares (in desperation), and an additional $27 per share to keep the business alive, so a total of $38 per share. Ignoring any residual book value (conservatively again), then we can say that we are paying 38/27 = 1.4x book, for a business that normally generates +20% ROE (of REAL earnings).

The final conservative assumption in all of this, is that it ignores the value in any pent-up demand for travel (which one would have to think will be substantial, to put it mildly).

So, under exceptionally pessimistic assumptions, we are talking about a real business with real cash flows, at very high rates of return, for the bargain price of 1.4x book. Compare that to some of the recent IPOs and 'tech stocks', where values have been based on highly optimistic projections premised on aggressive growth rates, and illusory cash flows.