RE:RE:RE:Hard to ignoreAt the current share price, STC shares trade at 6.8x EV/EBITDA on (conservative) F2018 EBITDA guidance. In my opinion, that's absurdly low for a company that is growing +10% organically, is debt free, and generates healthy FCF. While FCF converstion is likely to come in at 60% this year, I would think continued organic growth and M&A should see FCF conversion improve.
The shares should be trading between 8x to 10x EV/EBITDA, which would support a valuaiton range of $0.90/share to $1.15/share. I think the next deal should help increase interest (and liquidity). Also, the company's ability to finance a deal with roughly $4 million (or potentially more) should help keep interest in the equity relatively tight.
These levels represent a great entry point, despite the shares strong performance this year.