GH trading at 11.2% Free Cash Flow yield - Nobody knowsShould be pretty obvious by now that GH's operations are much less sensitive to commodity prices than the operations of E&P businesses.
"Should be"
Wanted you guys to see where we stand amongst the Big Dogs.
Our Free Cash Flow yield for 2024 will be north of 11%
Our Free Cash Flow yield in normal market conditions "Should be" closer to 7.5%, simply put, because we have
much LESS risk than E&P businesses.
Free Cash Flow of Pembina Pipeline Corp is 7.0% as a predictable, stable utility business.
Gamehost, while much smaller in size, warrants a FcF yield of 7% to 8%, let's call it 7.5%.
This is where you can figure out how GH is mispriced in the marketplace:
GH today @ 11.2% 2024 FcF = $9.65 share price
GH today @ 7.5% 2024 FcF = $14.40 share price
(Maths: $1.08/sh FcF / 0.075 = $14.40sp)
I know there's a lotta people on the sidelines scratching their heads about lack of momentum for our shares after a respectable 2023 Q4 and FY2023 performance.
Stock markets are not efficient.
For that reason, we can find high-quality businesses trading a heavy discounts to their Fair Value.
GH is a micro-cap Warren Buffett type stock. He'd probably own it if we were a $10B market cap.
Share price has recovered from $4 to almost $10 since Pandemic lows. It's been a slow recovery, we are running 4 sled dogs while our peers have 18 dogs in the same race. As debts are paid down, shares bought back, we will have more money for sled dogs.
The sled dogs are the Dividend, and people won't bet on our race team until they see we've got those 18 dogs.
People won't pay $18 a share until they see the dividend at $0.84/yr, that's Kasking's Lucky $0.07/mo. target dividend.
You want to hit that Lucky 7's bonus round, you gotta wait it out.
So while the share price does not yet show us strength, the Financial Statements of the business show some serious muscle being built.
If you don't look under the hood of the car, you won't notice that sleepy PT Cruiser has a 400hp big block V8.
Do some math, buy some shares.
Sit tight. $14 in sight.
