Completely concur Gralynchett, Come back to my price range here...

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Galba

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13/10/14

16:28

Post #: 14117379
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Originally posted by Gralynchett ↑

Despite selling out just over a month and half ago, I'm finding myself tempted to get back in. In just over 1.5 months the share price has fallen ~23%, significantly more than the general market, with no obvious fundamental reason.

At $2, I sold out primarily because of operation and structural issues more than valuation. At $1.56, this can potentially offer value even if it continues on its current operational decline.

I think the following metrics illustrate the cheapness on this stock:
P/E: 7.8
EV/EBITDA: 6.52
and my personal favourite:
Market Cap/FCF: 11.26%

While the print assets are declining, this business is still a significant cash generating machine, which as mentioned above results in a very respectable FCF/market cap yield of 11.26%. Additionally, unlike some businesses which at present have great free cash flow relative to price (i'm looking at you mining services), SWM is relatively stable business and easy to forecast.

I'm thinking about buying, but I'm not there yet. Primarily because:
a) The market is starting to through up some value in some better quality stocks and I wouldn't be surprised if these opportunities improve over the next few months. If possible, i'd rather deploy my excess cash into blue chips, rather that SWM (still a quality company, but not my definition of blue chip)
b) I need to get more comfortable with the SPS' and their potential dilutive effect, especially with the dividend yield above 6% (thereby triggering a conversion price adjustment).
c) I've started to benchmark against the other free-to-air listed companies, and need to do some further analysis on this
d) I think it could go cheaper. Just a gut feel really, but it's evidently an out of favour stock and is being sold off pretty heavily.
e) Whilst, gearing level is pretty mild at ~30%, interest expense is still a pretty significant cost. I would like to do some sensitivity analysis around interest rates and the effect that would have on free cash flow.

Regards
Gralynchett

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Completely concur Gralynchett,

Come back to my price range here @ 1.50. Easily the cheapest of the media plays right now, even with declining Print.
But as you elude to you can almost throw darts at the index as there is a truckload of value there right now.
If you're still interested in research, check out the business. About a week ago they interviewed the CEO of Fox, definitely worth a look in. Some interesting times ahead for the TV providers competing against the likes of the NetFlixe's Apple TV's. As always, all about content, and in particular sport. Still a market out there for TV, just not sure if it commands the gidy multiples it once used too.

SWM Price at posting: $1.53 Sentiment: None Disclosure: Not Held
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0 Great analysis

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(20min delay)
Last 17.5¢		Change 0.000(0.00%)		Mkt cap ! $269.3M

Open	High	Low	Value	Volume
17.5¢	17.5¢	17.0¢	$24.15K	138.4K

Buyers (Bids)

No.	Vol.	Price($)
7	555517	17.0¢

Sellers (Offers)

Price($)	Vol.	No.
17.5¢	382503	7

View Market Depth

No.	Vol.	Price($)
7	555517	0.170
8	1157964	0.165
8	387268	0.160
4	300093	0.155
21	467084	0.150

Price($)	Vol.	No.
0.175	382503	7
0.180	549367	12
0.185	575404	8
0.190	434000	5
0.195	94804	4

Last trade - 16.10pm 17/09/2024 (20 minute delay)

SWM (ASX) Chart

Completely concur Gralynchett, Come back to my price range here...

Siren Gold boosts antimony resource by 66% to 14.5Kt at Auld Creek, NZ

Petratherm adds $1.6 to the piggybank ahead of SA titanium drilling program

Altair Minerals hits high-grade copper and gold at Wee MacGregor, QLD

Winsome scoping study proposes low-cost operation for Adina lithium project

Western Mines identifies 2 high-grade zones at Mulga Tank in WA

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Completely concur Gralynchett, Come back to my price range here...

Top Stories

Siren Gold boosts antimony resource by 66% to 14.5Kt at Auld Creek, NZ

Petratherm adds $1.6 to the piggybank ahead of SA titanium drilling program

Altair Minerals hits high-grade copper and gold at Wee MacGregor, QLD

Winsome scoping study proposes low-cost operation for Adina lithium project

Western Mines identifies 2 high-grade zones at Mulga Tank in WA

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News