Silver Chef - Outlook just keeps getting stronger

Silver Chefs (SIV) innovative Rent-Try-Buy product provides small business owners with an equipment financing option that provides much greater flexibility and helps to “share” the risk of purchasing new business equipment. Understanding this customer behaviour provides an insight into the growth dynamics of SIV. During 1H16, SIV achieved 33% growth in rental assets (the lead indicator of revenues) on the back of record breaking growth in the GoGetta business and continued strong growth in the hospitality business. The newly established Canadian operations are now breakeven with a huge market opportunity still to be exploited. Based on consensus earnings estimates the stock is trading on a 1 year forward PE of only 11.5x and an EBITDA multiple of 4.0x. Given the growth profile and strong balance sheet of this company we believe there is significant valuation upside. (VIEW LINK)