PSFE stock: Yahoo -> Finance -> Conversation | $5.20/ share in 2 years

Backed up the truck today for PSFE. Reasons are as follows:

1) Trading at just 10x EV/EBitda
2) Generating sizable freecashflow, and at $2.80/share, it equates to over 11% ROE.
3) Given that largest shareholders are very savvy Private Equity shops (Blackstone being the largest), I can see this puppy being sold in coming 2 years at 14x Ebitda. Assuming no growth in Ebitda, this amounts to share price of $5.20. This equates to 85% return in about 2 years from current price of $2.80/share.
4) New CEO will be more aggressive in cutting costs to generate Ebitda…….so in the event we go in recession, he will be in lock step with revenue decline to generate flat cash flows.
5) There is an upside case where they gain more tRaction and the stock breaches $6 in 2 years.
6) Downside is limited given the combination of both multiple compression and cashflow compression being priced in already.
7) Compelling risk/reward given a differentiated leadership position in gaming industry, strongly aligned large shareholders, new CEO.

Guidelines

• 

  16 hours ago

  They did the cost cutting, they got 1b from SPAC investors, added another 1b in debt and EBITDA isn't growing? That's the reason why we are this low. If growth occurs (10-25%) yearly should be possible in the business + high growth verticals we might see an uptrend but for now nope.
• 

  yesterday

  I already backed the truck over myself on this one, but managed to add a bit on the dip to average down. If we can clear the ER without a big negative surprise, write down, etc., we should be an uptrend and retest of highs...
• 

  yesterday

  @Bee They just reaffirmed 1Q guidance, as well as 2022 guidance. At current share price, the company is trading at 10x Ebitda and 3x revenues. This for a cash generating company with 14% ROE. And, by the way the price of $2.80/share is well below what insiders just paid to acquire a ton of shares (they paid around $3.85). Since you are confident about its bankruptcy, you should buy the Puts from me (happy to sell them to you for just $1 with strike price of $3 and Jan 2023 expiration).
• 

  yesterday

  @Bee then keep shorting. I’m betting on new CEO and their positive cash flow.
• 

  yesterday

  Too bloated. Needs financil restucturing. Too many shares issued. Debt to high. Its formaula for filing of Ch. 111 and banjruptcy. Depression coming.