Service Stream Surpasses Even Our Expectations

Forager Funds largest Australian holding Service Stream (ASX:SSM) released its half year numbers after market close today. I've written about this stock a few times on Livewire and it keeps delivering for us and other shareholders. EBITDA of $15.8m was another half-on-half increase and it has been spewing out cash thanks to working capital improvements (this stock had a market cap of $60m a few years ago and has generated more than that in free cash flow in the past 12 months alone). With revenue growth baked in, management's forecast of a similar second half looks easily achievable. Taking them at face value and adjusting for 6c of distributions to be paid soon, the stock trades at just 9 times earnings despite doubling in the past 18 months. We'll meet with management over the next couple of days but everything seems to be progressing smoothly.