Early1, part of the problem is the lack of generating cash and you might just check the huge discrepancy between reported NPAT and operational cash as per the Cash Flow Statement.
The "value trap" is one where the company continues to earn as you suggest but the market does not attribute any value to its earnings and this is certainly the case with FSA over the past three years, which is the time I have been involved with it.
Unless we get an expanding PE then we might as well shove the additional profits not distributed as dividends down a hole.
As the old saying goes:
Sales for vanity Profits for sanity But only cash in the bank puts gas in the tank!
Put simply, I want to see more CASH generation by FSA....not a bulging Receivables book. I suspect institutional investors who scour the small end of town are wanting more cash generation too.
Don't get me wrong, I am a FSA fan and probably a Top Twenty shareholder now, but I'm desperately searching for the handbrake on our share price.
I really believe we should be trading at a PE of 6 or 7...minimum! Been too long hovering in the 4's!
FSA Price at posting:
27.5¢ Sentiment: Hold Disclosure: Held
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