That upgrade to FY19 expectation, to $190m-$200m, from $185m-$195m for EBITDA, appears to me to be a bit light, given the industry-wide evidence of 5%-7%pa increases in commercial rates.
And it is also worthwhile noting that the new guidance includes a ~$2m, YTD, mark-to-mark on the value of SDF's 5m shares held in JLG (incorporating short-terms variations in the value of listed securities in the formulation of earnings outlook forecasts...who does that?)
It strikes me that they threw everything they could at this updated guidance figure, in order to keep a cap on it.
I strongly suspect that they will finish the year closer to the $200m EBITDA level, and probably above it.
Trouble is, even with that prospect over "over-delivery against under-promising", the stock does not appear to be overly cheap on near-term point multiples, with P/E ~19.5x and EV/EBITDA ~12.5x.
Fine business, though, and one that is becoming even better with the investment in the Steadfast Client Trading Platform, which is embedding relatively meaningful organic growth for the next 5 years.
SDF Price at posting:
$2.88 Sentiment: Hold Disclosure: Held
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