Buying an Overlooked Cash Flow Giant
The Compounding Dividends Portfolio now has 4 great dividend-paying companies.
Today we’re buying a fifth - this on is a pure Cannibal Company.
While it doesn’t pay a dividend, this company has been putting nearly 100% of its Free Cash Flow into Buybacks at very attractive valuations.
Our Next Stock
Our next stock has a dominant market position, a strong history of growth, and new management that’s very shareholder friendly.
Other reasons we love this company?
Solid Balance Sheet - the company could pay off its net debt with a few months of Free Cash Flow
Lots of Cash Flow - the company has grown its FCF by 15% per year for the last decade
Secular tailwinds - the company’s industry is expected to grow between 11% and 21% per year for the next 5 years
Massive buybacks - the company has bought back more than 12% of shares outstanding in the last 2 years alone
Attractive Valuation - the current P/E ratio is 65% lower than the 5-year average
A conservative Earnings Growth Model says we can expect a 12% return
Other methods predict up to 20% returns per year
Let’s dive into the full Investment Case and prepare our transaction for Monday.