valuedontlie Posted May 22, 2019 Share Posted May 22, 2019 This has rolled back to Dec 2018 levels and looks interesting again... They make checks and other "declining sales" type products (~56% of sales) and offer marketing/business services (email marketing, incorporation, web design/hosting, payroll, etc.) which are growing and ~43% of sales. The company has redirected cash from the declining businesses into growing businesses over the past decade or so. Over that period, net debt is virtually unchanged while cash flow up $150m or so and share count down 15% or so. Not bad... New CEO just joined and is pulling back on tuck-in M&A in favor of buybacks at the moment. Cash flow guide for 2019 is $260m FCF on 44m current shares = $5.90/sh with stock right around $40. Call it 7x FCF and 5x EBITDA here. The secularly challenged checks business declined a whopping 4.5% in 2018 while the growing segment was up 11% (tuck-in M&A fueled)... Link to comment Share on other sites More sharing options...
valuedontlie Posted April 4, 2020 Author Share Posted April 4, 2020 Here we go again... $23 stock x 42m shares = $970m market cap... ~$800m in net debt = $1.8bn EV This business is pretty dependent on small business activity/formation (an obvious risk right now) but I take some comfort that they held up very well during GFC -- revenue dropped about 20% from peak to trough and op cash flow dropped ~16% from peak to trough (from $240m down to $200m) leverage situation was nearly identical back then so balance sheet hasn't deteriorated. They have some interesting service lines and I believe are trying to look like a combination of GoDaddy and Bill.com, the checks and forms business has been a stable decliner at LSD per year. New CEO in there with a plan for organic growth. Like many other long-running roll-ups they've never really combined business units or attempted to cross-sell products... i.e. if we're hosting your website we can offer you digital payments and an SEO plan... I think they'll continue to generate cash even in this environment... doubt it'll go to buybacks (probably lower debt)... but I'm guessing shares today are a very LSD cash flow multiple with a good balance sheet... Link to comment Share on other sites More sharing options...
Junto Posted November 6, 2020 Share Posted November 6, 2020 I have been buying down in the low 20’s. Great earnings today. Trading at less than 5 times earnings with 5%+ dividend. Link to comment Share on other sites More sharing options...
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