Stargroup (ASX:STL) offers a compelling investment with its current market capitalisation of $18.1 million being lower than its net assets of $25 million including deferred tax assets.
For comparative purposes, Canadian listed Directcash Payments Inc (TSE:DCI) has net assets of $100 million yet a market cap of circa $520 million.
If Stargroup were to have the same market cap to net asset ratio as its Canadian peer, its market cap and consequently share price would be circa 7x higher.
The recently completed acquisition of Indue Limited boosted Stargroup’s ATM network to 2,414 making it the second largest independent provider behind Directcash Payments Inc.
Stargroup’s guidance for FY18 is revenue of $17-18 million, EBTIDA of $4-5 million and NPAT of $1.5-2 million.
Todd Zani, CEO, commented: “Our current annualised revenues are circa $15million and our projected FY18 revenues are $18million
“This is not an unrealistic expectation of the anticipated organic growth across our four divisions.”
Importantly, Zani and his family are a major shareholder in Stargroup with 9.48%.