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- Greystone Logistics, a microcap manufacturer of plastic shipping pallets, is one of the most appealing investments I have seen.
- With an enterprise value to EBITDA at 6.28, investors are currently writing off the company as a risky, debt-ridden enterprise that relies too heavily on one key customer.
- We believe that GLGI's business, backed by its quality products and sustainable value propositions, will continue to grow, and, at current prices, offers asymmetric upside and optionality.
- With the most conservative assumptions and completely discounting a potential deal with Anheuser Busch, we project that GLGI will achieve a 2015 free cash flow yield to EV of 7.8%.
- Applying a 45% haircut to historical non-Miller Coors sales growth, we conservatively value shares at $0.73, 38% higher than the last sale price of $0.53.
- Greystone Logistics' CEO has privately acquired a plastic pallet maker with 3X GLGI's revenues.
- Various news items and documents show that Kruger's holding company bought plastics giant Trienda out of bankruptcy in a sale closed on April 10.
- A merger of Greystone and Trienda seems imminent and bodes very well for the former's shareholders.
- A look at potential conflict of interest.
- Greystone now has an all-time record $2.9M of inventory on its balance sheet, potentially gearing up for a large sale.
- Pallet sales to non-MillerCoors customers rose by 43% in the quarter, continuing a promising trend.
- One-time charges turned an otherwise flat quarter into a one penny loss for shareholders.
- Greystone Logistics has established an early competitive advantage in the plastic pallet industry.
- I expect periodic, large jumps in revenue and profit over the next several years.
- The company is, quite simply, priced wrong at 5X earnings.
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