Healthcare microcap w/ inflecting cash flow

Stock trades at 5.6x EBITDA / 5x earnings and FCF inflecting higher

This stock is down 80% since it was spun off by its big cap healthcare parent not long ago! It went from small cap to micro cap in a hurry. This spin trades at less than 1% of its parents’ market cap.

The thesis is pretty simple:

• Good business in a stable/growing market (though impacted by COVID)

• Recent spin with little-to-no attention (from mega cap to micro cap)

• Cash flow inflecting / trading at 25% FCF yield

I hate to call something an “easy double” but this has the makings of just that. Not much coverage, not much historical data or forward estimates to screen for, cash flow looks terrible from the spin but is inflecting higher.

Heck, after initiating the stock at 2.5x the current price, JPM recently downgraded “just because.” (Actually they cited a “limited track record as an independent company.”)