Deep Value in PHOWith $32.2m in cash, this little company is holding 31 cents of its market cap in zero risk cash. PHO's 2015 YE annual income is 8 cents per share, which we are on track to repeat in 2016. Therefore, 79-31=48 cents, which results in a trading multiple of 48/8 cents equals 6X multiple. That means we are deep value investors as typically a solid business like PHO with no debt and solid revenues would trade around a 10X multiple. The market is not giving PHO any value for the cash being held on the books.
The 1.10 target price being predicted by analysts is very conservative as the target is simply 8 cents x 10 multiple plus 31 cents of cash on hand. $1.10 target price is therefore very realistic as it merely recognises the cash on hand, which the market is not giving PHO credit for in our share price. So when Dave Barr of Pender funds and Euro Pacific are buying at these levels, its because its a no brainer for them and super low risk.
I'm holding!
Muff