Finance > Shares

Companies I didnt buy

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galumay:
EAS an accounting services business that I had my attention drawn to by Matt Brazier, https://www.mattbrazierinvestmentdiary.com/2019/05/easton-investments-limited-asxeas.html#more and his linking to DX Capital report, https://www.dmxam.com.au/10_04_2019_easton_investments_limited_asx_eas_.html

Its currently trading at about 97c and in a quick look I couldn't see that it was at any discount to value even allowing for some pretty good growth, I can see them making about 6c EPS this full year, which would give them a value round 80c, even if they manage to double the EPS to 12c in the next couple of years I only see a value of around $1-60 so I couldn't get much enthusiasm for the business.

I also could only see single digit ROIC, which is a bit low for my liking.

galumay:
PNV, the spinoff from CSIRO with the burns and wound mesh platform, great product, just about breakeven, but with 600m shares on issue I reckon it would need NPAT of over $50m to be anywhere near fair value at the $1 something price it is now. Thats a big ask.

galumay:
VOR, KPG PPK & SIT all go on the list, PPK & SIT because i hold indirectly thru EPG fund and I dont want to be too corelated, VOR  I just couldnt find conviction to buy & KPG has too much debt.

PPK $4.50 VOR 0.012c KPG $1.03 & SIT 0.069 oct 30 19

galumay:
VHT, following a write up from Owen on Rask Invest, https://invest.rask.com.au/2020/07/22/buy-volpara-health-technologies-asxvht/ i decided to have a look.

For me the article is filled with narrative, but no realistic outline of how the business would ever get to justifying its current price, let alone any higher. I just through in a reverse engineering on the DCF, assuming its scales up, becomes a mature business with steady slow growth potential after it reaches that sort of scale. That would require the business to generate FCF of around 8c per share, or getting close to $20m FCF, on a business that has revenue around $12m now, thats a huge ask, even if it managed to multiply that revenue by say 1000% to $120m, it would be a great business that had sufficient FCF margin to generate $20m FCF. As an example CSL generates 8x or 12% FCF yield.

It just seems to me to be a massive speculative bet in a sector that most bets fail.

I will watch from the sidelines, its $1.46 in July 2020

25/10/22 60c!

galumay:
SSG Shaver Group, had a good look at this one and thought about it at 75c. Just couldnt get enough conviction to open a posistion august 2020

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