Very pleasing set of third quarter numbers from Avesco. Given that the company is only valued at around tangible NAV but is highly cash generative, profitable, paying dividends, possibly due a windfall of up to £1.40ish per share and has been recording double digit growth into severe economic headwinds over the past few years, it's hardly surprising that Richard Murray has just spent a further £77,000 on shares.
My argument would be that at the current share price, you're just paying for the company's assets and getting the business and any possible windfall for free.
The company is extremely cheap on any number of measures. From the third quarter report, the following statement from Murray says, "we believe that the outlook for the Group has never been better.", and he's just put his money where his mouth is. That's good enough for me.
Furthermore, how much would a potential acquisitor have to pay for this company?
Certainly a hell of a lot more than the 1.5 times EBITDA it's currently valued at. Given the market that they operate in and prospective growth (particularly as world economic conditions begin to improve), all things considered, I wouldn't want to part with my holding for anything less than £4+. Still very much a long term hold for me.
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