Recently there has been a few postings on PCCS in i3investor. Yes, this company have turned around and have been posting good profits in the past few quarters.
Here, I want to highlight something that really caught my interest in this stock.
It is the FREE CASH FLOW generation!!
Cash Flow Statement (RM'000) |
2014
|
2015
|
2016
|
2017
|
2018
|
9M 2019
|
Net Cash Flow from Operations |
20,550
|
2,429
|
-2,485
|
-2,644
|
22,067
|
36,190
|
Purchase Of PPE |
-4,206
|
-9,998
|
-7,458
|
-3,973
|
-4,353
|
-5,190
|
Disposal Of PPE |
407
|
626
|
964
|
297
|
976
|
1,045
|
Free Cash Flow |
16,751
|
-6,943
|
-8,979
|
-6,320
|
18,690
|
32,045
|
Now let's look at the Enterprise Value (EV) of the company.
Below is the formula for calculating EV:
EV = Market Cap + Market Cap of Warrants + Market Value of Minority Interest + Debt - Cash
Market Cap (RM '000) | 80,865 |
Market Cap of Warrants (RM '000) | 16,203 |
Market Value of Minority Interest (RM '000) | 1,112 |
Cash (RM '000) | 70,367 |
Debt (RM '000) | 45,847 |
Would it be a very good investment if you only need to pay RM73m for the whole business while the business has the ability to generate RM32m of cash in just nine months alone.
This means that you will be able to get back all your investment within two years and own the company for no cost at all.
Where else can you find this kind of investment???
You tell me.
https://klse.i3investor.com/blogs/Ong8888/206807.jsp