Paul Scott Stockopedia comments.14 Nov 2023 09:22
Paul’s opinion - today’s update reassures nicely, which it needs to with a forward PER c.20x.
A stand-out feature of FNX is how sticky its clients are.
Also the international expansion excites me, as this can apparently be done at little cost & risk.
I’d like to speak to management again, and my key question would be how can it dislodge incumbents in international markets (which it must have done very effectively in Ireland), to grow further? Bolting on additional, decent-sized overseas markets, could be transformative, if it’s possible.
Fonix seems to have an excellent business model - capital-light, and cash-generative, so it can self-fund growth at the same time as paying out most of its cashflows as dividends (with cover of about 1.2x).
I’ve reviewed this company 6 times in the last year, in 5 cases going green, with just a slight wobble in Mar 2023 when the share price got a bit ahead of itself at 237p, so I shifted down a gear to amber briefly, purely on valuation concerns.
With the price now more reasonable, at 193p, and the good news continuing to flow, I’m happy to remain at GREEN.
This really does look a very good, high quality company, that’s also paying a c.4% dividend yield. It’s not put a foot wrong since floating in Oct 2020. Management remain big shareholders - there's nothing quite like the owner's eye!
Superb track record actually -
https://app.stockopedia.com/content/small-cap-value-report-tue-14-nov-2023-placeholder-980108?order=createdAt&sort=desc&mode=threaded
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