mardi 5 mars 2019

GDI integrated facility services (GDI.TO)

GDI is an interesting canadian stock. It's the equivalent of MTY in the cleaning sector. They play the game of acquisition in a sector which is immuned to technology and that's an essential service. Because nobody likes to work or shop in a place full of piss and traces of shit.

It's a good sector. But GDI has had some tough years in the recent past. Things are looking better now. Actually, the last results were pretty good:

Q4 2018 revenue of $303.3 million, an increase $55.7 million or 22.5% over Q4 2017
Q4 2018 Adjusted EBITDA1 of $18.4 million, an increase of $4.3 million, or 30.1%, over Q4 2017
Q4 2018 net income of $3.6 million, or $0.17 per share compared with $3.4 million or $0.16 per share in 2017.

On an adjusted basis, results were pretty good. On a regular basis, not so good (0,17$ per share VS 0,16$ per share last year). But, so far, it's still interesting. Let's continue...

Forward PE: 29
Average annual EPS growth last 5 years: -5%
Market cap: 475 M$
Current ROE: 5
Average ROE last 5 years: 1
Beta according to Yahoo Finance: 0,30
Free cash flows: Very interesting lately, but not so good a few years ago.

It's enough for me. With such a high forward PE, such a low ROE and such very ordinary results in the past, I wouldn't pay 29 times next year's earnings.

I wouldn’t pay that price with Constellation Software. Si, why should I pay that price for a stock which is very far from Constellation Software on the quality scale?

I'm not interested to go further. Maybe I'll miss something, but there's a lot of much more interesting occasions out there with a better track record. 

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