When looking for a company that is 1. Globally Diversified 2. Highly undervalued from a free cash flow perspective 3. Has decent growth potential (Over 10%)
choices are limited! However Modern Dental does meet all of these criteria..
1. Revenues are globally diversified with about 35% coming from Europe 25% USA and 40% Remainder of the world including a larger and larger share coming from mainland china.
2. Trading at about a P/E Ratio of 9. EV/EBITDA about 6. Free Cash Flow yield of about 15%.
3. Growth outlook is great. Chinese revenue grew at a rapid pace over the past couple of years but the outlook is even better.
I am loking at this from a long term perspective and believe we can easily trade at HK$ 7.5 over the next coouple of years (And likely even sooner)