Update: I have since found the likely reason for the very cheap price on DRA thanks to a user on HC who posted just before I was about to do a bit of a deep dive. There are multiple lawsuits against DRA with claims in excess of $300-350mil if all findings were against DRA. The number of cases is also concerning in terms of reputation. I'm going to assume half of $300mil will be paid out for valuation. Target MC = 132 (cash) + (5 x 41.6) - 150 (settlements) = $190 mil Price per share = $3.50 I wouldn't be touching this even with legal matters resolved as I think it shows a deeper problem within the company, except in the case where all litigation against DRA is found in DRA's favour. Previous: I started looking into the company based on a very low EV/EBIT ratio (CY20 = 1.9 and CY21F=1.5) when using an EV/EBIT screener. DRA global is a mining services company and can provide services from end to end over the lifecycle of a mine from the start of exploration. Very diverse range of nations in which they operate but were originally from South Africa now headquartered in Australia. DRA was listed recently with little capital raised. The company has good cash flows and lots of cash sitting on the books hence the great EV/EBIT. Listing looks to be a way to enable existing shareholders to exit in time and/or raise further cash if required for growth. I don't invest in resources because I'm not across the detail I think investors require to play in that space but I will consider the resources services sector. The problem for me even with small amounts relatively that I invest is the lack of liquidity (less than 5k of shares day with many zero transaction days) and no catalyst for share price increase. The buyback rights reduce the value of the cash sitting in the bank as well. This will be a watchlist company while waiting for a liquidity event. If I were to enter, it would be as a P/E play. Has anyone else looked into DRA? Seems very under the radar? Valuation: - EBIT = $50 mil reduced for the UPRs assuming in this case they are issued as equity so reducing the EBIT to account for dilution gives $41.6 mil. - EV/EBIT multiple of 5 as an estimate. Livewire article of resource services companies gave a median EV/EBIT multiple of 7.2. Reducing for the lack of liquidity and potential risks due to the countries in which they operate. - Cash = $132 mil. MC Valuation = 132 + (5*41.6) = $340 mil Valuation per share = $6.27 Equal to equity price = $3.13 Equal to cash price = $2.43 (UPRs are worthless for a share price below $3.10)