Looking for spooks, page-42

Brenomulo, I read your post, but did not give it the time that it deserves, but I will when I have the time and the spirit to do so. Until now I have tended to avoid the tedium of considering guesstimating FRI's trajectory via the bottom-up process that you used, because:

a) I assumed that FRI itself would be doing that style of analysis, and I have used the repeated instances of directors buying shares to support my investment decisions are probably;
b) Euroz has followed that bottom-up approach, and its reports basically supported my top-down picture of FRI as a business; and
c) sheer laziness on my part.

On dividends, I like to see a company that is five years old, or older, paying dividends, but other deployments of funds can be justified - e.g., share buybacks, debt reduction and debt avoidance that make sense. I agree that the larger projects are likely to need more funding, so the historical DPS trajectory, may flatten for some years as FRI moves to a higher per-project business model. Another reason for liking dividend-paying stocks is that getting a return on my original investment puts me in a frame of mind that can sit out the mood swings of Mr Market - for many years if necessary.

Management should not be obsessed with growing NPAT. What is more important is the long-term EPS trajectory, and hence share buy-backs may at times be the optimal target for allocating funds, especially for a firm like FRI that does not have vast fleets of equipment and hordes of employees that need to be kept busy.