I agree Moreld and like you I am always on the hunt for these...

First 13 Last

Share
Profile

Follow
Andrew1234

5,877 Posts.

305

09/09/17

13:58

Post #: 27106281
Share

Originally posted by moreld ↑

"While Big Un certainly trades on a big valuation,"

I disagree with that statement. Maybe if you simplistically look at widely published rear-view valuation metrics you would think that, but if one digs a little deeper then Big Un looks cheap.

From my perspective Big Un looks to be substantially undervalued. I won't go into my full valuation here, let's keep it simple.

In Q4 FY17 it bought in $9,365k cash and had net operating cash flows (OCF) of $3,826k for around a 41% cash flow margin.
Extrapolating from one quarter cash flow is fraught with danger, but let's do that to keep it simple.

Q1 FY18 Big will bring in over $14 million in cash.
If Big maintains similar margin that'll deliver $5.7 million in OCF.

That gives a run rate of $22.9 million OCF. BIG has a fully diluted market cap of $227 million when all its deep in the money options are included.

That means this hyper growth company, that is now self funding and spitting out a growing pile of cash, is trading at a low multiple of less than 10x run rate OCF.

While a 41% cash flow margin may be hopeful, looking at the margins and growth from a multitude of likely outcomes all point to BIG being cheap.

If anyone can point me to any ASX company with similar attributes please do so.

Expand

I agree Moreld and like you I am always on the hunt for these type of stocks so all ears

BIG Price at posting: $1.42 Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

ZNC

Zenith's sale of Develin Creek delivers $975K cash, with shares up 13%

ACW

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

The iron ore comeback: Can it last?

COD

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

HAS

Hastings progressing Yangibana to production with lower costs