RE:RE:GUD is Already a Cash CowTheRock077 wrote: There is only one comparable Canadian Pharma stock comparable to GUD and that is Biostent ( RX --$8.50 ).
It does not have GUD's growth profile but has no debt and $1 per share in cash.
A better measure of business performance is free cash flow.............unencumbered cash flow that goes to the cash position.
On an annual basis ( H1 annaulized ) , GUD will have free cash flows of $28.5 million in 2017.
RX, by the same prorata method, will have $2 million.
RX trades at 63 times its free annualized 2017 cash flows.
Applying that valuation multiple to GUD, the fair value is $1.8 billion or about $12.50 per share.
To this, you can $5 per share cash and liquid investments, for a total fair value of about $17 per share on 2017 expected financial perfs.
If , as others speculate, free cash flow increases to $50 million in 2018, fair value would be above $3 billion.
Are we undervalued.
Only idiots and bashers would say NO.
Great post Rock. Excellent summary, and why I'm still grabbing shares.