IDT 0.00% 17.5¢ idt australia limited

pwallace on fundamentals and outlook i think its a good 6 month...

  1. 75 Posts.
    pwallace

    on fundamentals and outlook i think its a good 6 month + buy.

    Valuation highlights (full summary below):

    Enterprise multiple (EV/EBIT) 5.98
    Enterprise multiple (EV/EBITDA) 4.73
    OCF/Revenue 0.36
    Price/OCF 6.25
    per 2010 9.93
    per 2011 8.41

    ... and no debt to speak of.... in sum, trading well below market enterprise multiples, very good at turning revenue into cash, well positioned to take up debt if strategic purchases arise, and a healthy yield.

    Since 2006 has traded in the range of 12-20xper, now at 9.5x per + forward per's below historical.

    AspectHuntley (not that they often get it right) have an accumulate recommendation back in sept 09 (when share price was 1.65 ish). they noted

    "The weaker FY09 result reflects a number of clients reducing drug development activities to conserve cash in response to the GFC. A major setback was Pfizer discontinuing an antiobiotic trial that was set to provide several years of significant active pharmaceutical ingredient (API) manufacturing volumes for IDT. This followed commissioning and validation of a new purpose built facility that Pfizer funded. IDT is in discussions with two potential clients with antibiotic projects that could utilise the facilities. Negotiations regarding compensation of Pfizer for its investment are ongoing. We do not expect the outcome to negatively impact IDT. The CMAX clinical trial facility in Adelaide had a strong 2H benefiting from the CSL swine flu vaccine trial which will also feed into 1H10 volumes. The pipeline for this small business remains strong.
    Outlook: The global financial crisis continues to affect our major overseas pharmaceutical partners resulting in several major projects being deferred. As a consequence, the companys short term outlook depends on the resumption of growth of our overseas partners and identification of new projects. The companys debt free balance sheet means that IDT can take advantage of opportunities as they arise. The weaker US$ is a headwind until it stabilises."

    Their most recent investor presentation notes that they are becoming more agressive at getting new business, and are aiming to build stronger regional partnerships.

    I think north of $2 in 12 months time, assuming AUD doesnt achieve parity with the USD, and successful resolution of the Pfizer facility issues.

    but DYOR

    Valuation metrics .
    All in '000 using half year report and doubling
    Total shares outstanding 43,000
    Cash 1,830
    Receivables 8,809
    Inventory 775
    Other current assets
    Current assets 11,400
    Total assets 39,500
    Intangible assets 1,154
    Payables 1,804
    Current liabilities 2,500
    Non-current liabilities 2,790
    Total liabilities 5,248

    Value of minority interests
    value of preferred shares

    Revenue 26,700
    Other income
    Expenses
    Depreciation 2,400
    Finance
    Other
    Impairment
    tax 2600
    EBITDA 11,416
    EBIT 9,016
    EBT 9,016
    To shareholders 6,416

    Operating cashslow 9,500
    Free cashflow 1,834

    Current ratio 4.56
    Quick ratio 6.33
    Debt/Asset ratio 0.13
    Debt/Equity 0.15

    Market capitalisation 59,340
    Enterprise Value 53,949
    Tangible enterprise Value 52,795
    Dep and am


    Enterprise multiple (EV/EBIT) 5.98
    Enterprise multiple (EV/EBITDA) 4.73

    OCF/Reveue 0.36
    OCF/Share 0.22
    FCF/Share 0.04
    Price/OCF 6.25
    Price/FCF 32.36

    PER 6.58
    NTA per share 0.770
    NA per share 0.797
    EPS 0.210
    Price/NTA 1.793
    Return on assets 16.2%
    Return on equity 18.7%

    2010 ebit
    eps 2010 0.139
    eps 2011 0.164
    per 2010 9.93
    per 2011 8.41
    div per share 2010 0.1
    div per share 2011 0.12
    div surprise
    risk adjusted div 2010 0.100
    risk adjusted div 2011 0.108
    yield 2010 7.2%
    yeild 2011 7.8%
 
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