RE:AXX getting interest from US investors Comparable telecommunications businesses—which are generally larger and more levered enterprises—are currently priced at about 6x EBITDA. Axia, in contrast, has no debt and has much more growth potential, but thus far lacks access to low-cost capital. Assuming the positives and negative offset, and applying the comparable multiple to our 2016 estimate of EBITDA, the value would equate to C$3.30 per share.
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https://www.stockhouse.com/companies/bullboard/t.axx/axia-netmedia-corporation?postid=21916318#sa58DR2eKmMg7DJe.99
I am a US investor who has been interested (and invested) in this company for 5 years. I have built a substantial position in it, and am glad to see it finally is paying off. I don't know much about "Vanshap Capital" but I like that they are interested in Axia. And I do agree with Vanshap in that their 2016 EBITDA and share price targets are "conservative". They wrote, ....
"Comparable telecommunications businesses—which are generally larger and more levered enterprises—are currently priced at about 6x EBITDA. Axia, in contrast, has no debt and has much more growth potential, but thus far lacks access to low-cost capital. Assuming the positives and negative offset, and applying the comparable multiple to our 2016 estimate of EBITDA, the value would equate to C$3.30 per share".
It seems they are saying that by their EBITDA growth projections, Axia share price should reach $3.30 by 2016, equalling an approximate $200m market cap and $35m of EBITDA. I have a hard time plotting any EBITDA growth curve for Covage as it still seems too early in the game. But one hundred percent of Covage produced $7.8m EBITDA in 2011, $10.3m of EBITDA in 2012, and we should see at least $16m of EBITDA in 2013. I think 2014 will be anywhere from $20m-25m of EBITDA and by 2016 Covage EBITDA could be north of $40m and that might even be conservative. And what if Alberta starts to grow again, and what about Western Mass, it should contribute EBITDA by 2016. EBITDA growth is anybody's guess, but I just keep hoping that the growth in France exceeds everyone's (IMO) lowball expectations and changes the perception of what the company potential is. I still have a $5 price target and I don't think it is by any means an aggressive target. And I think $5 will happen before 2016. (And I also hope that Axia management gets some holiday spirit and announces something soon in regards to a dividend).