Completely undervaluedThe SP should double by year's end after Q3-21 results are released.
Over the last 5 years, annual EBITDA ranged between $15m and $20m. In the most recent quarter (Q1-21), EBITDA was $10m. The Company has a net cash position and is printing money. The initiation of the dividend speaks to this.
From what I can tell, the company's association with West Africa required a discount relative to its peers, but profits are profits. I think some jurisdictions had unreasonably high tax rates in previous years which sucked up their operating cash but the company has pulled out of these areas and is diversifying into South America and these two moves are helping with operating cash flow.
Receivables are at a record high and when collected in Q2-21 cash will be flowing in.
$10m of EBITDA was earned in Q1-21 but le's say you reduce that to $8m a quarter. $32m for the year. 8 times EBITDA multiple (which I think is conservative). $256m enterprise value. With cash higher than debt, no need to reduce the enterprise value for net debt.
With almost 50m shares on a diluted basis, that gives you $5.12 in USD. Convert to CAD as the financials are in USD and you get a little over $6.00 CAD.
Use a multiple of 10x and you're close to $8.00 CAD. If you think the quarterly EBITDA run rate is $10m and not $8m, then you're looking at over $8.00 CAD.
I'm sure there will be some that will be taking profits in the coming days but this will be a hard one to not be in.
I see one analyst with a $3.25 target but his quarterly EPS is only around $0.6 for the rest of the year. We just had a quarter with $0.13 and all signs are pointing to similar levels for the rest of the year.
I don't see how this can trade below $5.00 in the coming months. Show me otherwise!