Thanks for that. This is a correct assessment of the immediate future. What do you see moving further forward?
Risks have been reduced substantially from the recent capital raise, and more importantly, saying goodbye to the dysfunctional Syntheo.
We have different emphasis, you look at earnings, I only look at cashflow. And we are now sailing close to 6x EBITDA, which is a valuation that assumes bankruptcy. With cashflow metrics, I dont need to care what the goodwill is and how much write-offs will affect earnings. And looking at cashflow means I dont need to care about accrued revenue shenanigans and whatnot.
A caveat: I took EBITDA to simplify matters. The figure I concentrate on is free cashflow, and despite the clusterf*ck last half, SSM is still churning back cash, lots of it, $18m in the last HY alone.
How about opportunities going forward? At these valuations, not many things need to go right. In fact, maintenance of current trajectory of $20m EBITDA will do me fine. IF they can find some extra margins, I will take that too.
SSM Price at posting:
22.5¢ Sentiment: Buy Disclosure: Held
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