Given the undervaluation of PAC’s investment in three boutiques, don’t believe anyone should be selling under $8 per share (this is a valuation of $400M which is 4% of GQG at $5B valuation and VPC valuation based on actual underlying growth of the business). $9 takes us to top end valuation of GQG at 4% and VPC. $10 takes us to GQG $5B valuation at 5% and VPC.
Due to low shares on issue, exponential jump in share price should be achieved with each revaluation step. It provides confidence that a margin of safety exists today and every $1 we invest is likely to be at least $1.50 in a worst case scenario.
The level of value assigned by the market to PAC is not reflective of its true value based on three of the 15 boutiques PAC owns. Nor is PAC management assigning an actual value, 7 times PE Ratio is not a rational valuation (PennyBacker above).
If three are undervalued then surely the rest are (except for those not earning yet). The market hasn’t had a chance to get to know IFP yet and it is too early to assign a value to it, but it is looking very promising. This would mean $8 Net Assets needs to be reviewed by management.
Best of Luck Lost
PAC Price at posting:
$7.36 Sentiment: Buy Disclosure: Held
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