TRJ - Charta and Price Action, page-103

Thanks for the reply
What you say is basically correct, I think. The market was clearly VERY disappointed with the latest result and guidance

I believe that the market is wrong (or at least has oversold) for these reasons:
1. Quality. TRJ produces quality, niche products that are hard to replace. Some people regard it as a producer of commodity products. It is not.
2. Growth of addressable market. The industries that it serves are almost certain to keep expanding for the foreseeable future
3. R&D potential. I don't include it in my valuation, and the market certainly doesn't. But TRJ has multiple potential future products and continues to spend on R&D
4. Price. The recent accounts are a bit messy due to aquisitions. Profitability is obviously low if you look at the published figures. But highly likely to improve in the future. Plus they expense most of their R&D spend. I believe that the best measure of value currently for TRJ is EV/revenue. Both of these figures are hard to manipulate and do not get messed up by accounting conventions or aquisitions. EV/revenue for TRJ is 1.41

For comparison:
Audinate (which is a true growth company, although still small, risky and unprofitable) trades at an EV/revenue of 10.04. Audinate has less than half the revenue of TRJ, but the market values it at 1110 million vs 178 million
Ansell (which is a large cap producer of a commodity product, gloves) EV/revenue is 2.04

If you believe that TRJ is likely to outperform Ansell over the next 5 - 10 years (I do), then it may be worth buying. I don't see it ever trading at an EV/revenue of 10 like Audinate, but a re-rate to say an EV/Rev of 3, combined with ongoing organic revenue growth, could yield a very nice increase in the share price from this point.