Outrageously Cheap @ 0.5x EV/FCF
PoW (#7) Revisiting an old friend
In today’s not-so-deep dive we’re looking at a not-so-great business that just dropped some very positive news.
It’s a SaaS player in an oligopolistic market, running at ~40% EBIT margins…
And… it trades at just 0.5x EV/FCF.
In other words, in only 6 months, it should generate its entire market cap back in cash. That’s as cheap as it gets 🤑
But… What’s the catch?
Pick of the Week. A curated series of high-conviction research on companies currently under our microscope. We screen for specific dislocations where the market has mispriced the balance sheet or earnings power.
The Selection Criteria:
Asset Arbitrage: Trading at a discount to tangible liquidation value.
Backlog Disconnect: Future contracted revenue ignored by the market.
Hidden Margins: Structural profitability masked by temporary noise or CAPEX cycles.
The Structure:
The Business: A concise operational overview.
The Dislocation: The specific structural reason the opportunity exists.
The Valuation: A stress-tested snapshot including downside risks (”Red Flags”) and our proprietary score.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
