I agree, strong cashflows trading at 9x NPAT, or 2.6x EBITDA and currently spending $20M p.a. on R&D investment.
Debt was at $32M, but this is prior to the sale of reckon docs, so it is reasonable to assume further reduction in debt of $10-$15M in the next half. I personally see a nice growth runway with only mid-high single digit growth, however significant dividend growth as the company pays down debt to a comfortable level. I am not sure what there target is for debt, interest cover would be high, debt/EBITDA is ~1.0x and debt/NPAT is only ~3.2x which is not uncomfortable on any metric.
There is a lot of froth in the market, but I liken this stock to DTL - many similarities and it's not often you can purchase a stock at an 8% yield when there is a clear history of profit.
RKN Price at posting:
76.0¢ Sentiment: Buy Disclosure: Held
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