I don’t think I’ve ever done this before.
I am pitching that rare “wonderful business at a reasonable price”.
It’s a business with a household name. In fact, I would challenge you to even name a competing product.
And you can have it for a 7.5% FCF yield.
Management has said it intends to grow revenue 7-10% per year.
It takes no capital to operate.
The stock is trading at a depressed multiple as it was a recent spin-off from a Fortune 500 company. The spin off created forced selling.
Best of all, management has committed to returning 75%+ of FCF to shareholders.
Here’s the simple truth.
If a business pays you 7.5%, and that FCF can grow 7-10% per year, you will earn a 14.5-17.5% IRR, before accounting for any changes in FCF multiple.
It’s a business that is reminiscent of Moody’s or FICO. And I believe it’s for sale at the wrong price.
Today’s stock is…
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