Still not a lot happening. Thought the recent result would generate a share price move, but that’s been very moderate. The financial metrics are such that folks must fear something…indeed, they have been for some years. Otherwise, why would you not buy a company with free cash flow equating to 20% of the market cap of less than $300m, PLUS over $100 million in cash in the bank…and absolutely NO debt (surely a big plus at the moment).
Hopeful9, you make a good point about the lack of liquidity/shares in play trading wise. I suspect that’s playing a role in their reluctance to initiate another buyback. Still, if that’s the reason why the share price is lower than (I think) it should be, we should all be buying aggressively. Because it doesn’t impact on the intrinsic value of the company, which will surely be reflected in the share price eventually.
I suspect it’s other things holding it back. WeWork, although it seems to have failed, did show that a big operator can quickly move in and disrupt the market. Alf always argued that you can’t establish SRV’s service quality overnight, and he has perhaps been proved right, but institutions may still be wary of a perceived low barrier to entry. And I guess a world wide recession, which seems to be on the cards, will impact SRV.
Whatever it is, something is holding folks back, and has done so for some years now, because the share price to me isn’t consistent with the financial metrics, the results, and the current forecast (which is for a still higher profit in 23/24).
In the meantime, I guess we just keep gradually adding…and waiting!
SRV Price at posting:
$3.01 Sentiment: Buy Disclosure: Held
