Defensive acquirer update: 11% FCF yield, soon 19% or more.
Value sits untouched in deep corners of the markets while others sectors have the biggest valuations ever. Make no mistake, this is now that people are signing for their ruins again (after 2021) when buying unproven growth stocks at nosebleed valuations. 1 out of 10 will maybe give a long term good return, the rest will follow the road of the weed stocks, the AOL and America Online stocks or at best the Cisco stock returns from 1999. I have no idea which one will be the winner, and 99.9% of non genius growth investors also have no idea.
In other corners of the market, your Free cash flow yields are enough to produce excellent return without market reratings.
The company is a European food company. These products have the particularity of resisting all crises and having the power to raise prices. It is also a company that has done three important acquisitions in the past years and grew revenues and cash flow consequently. It has three more in the pipeline, and is good at integrating them. A risk of dilution to fund a large one negates the picture of a reasonable share price multiplication ahead. A risk well compensated in my mind, due to the undervaluation.
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