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#Deep value
Added 5 months ago

Under new CEO Myer has adopted prudent capital managment and cut dividend, reduced debt, cut unprofitable sales, clearing out unwanted stock, reduced floor space, refocused on exclusive higher margin brands.

At the same time managment have all been buying on market and have a mandate to hold the value equal one years worth of director's fees.

All this has led to a topline declining at 3.5% but should post a healthy profit and net cash position when it next reports due to improved margin and cost control.

FY19 it had a free cash flow of ~70 mil and at current market cap of 320mil (14/02/2020) should put up an EV at the half year somewhere between 200 - 250mil by my estimates with a half year net cash position of 50 - 100mil (excluding rental obligations). 

with an EV/FCF of 2.8-3.5 Im happy to initiate a small position at this point. If it falls significantly I will likely average down from here.

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#Insider buying
Last edited 4 months ago

John King has purchased around 120K on market over the last week.

Chairman purchased 99K

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#Improving fundamentals
Last edited 4 months ago
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