Q: A guest on market call yesterday recommended LNR as a stock that has no debt and projected to grow 25 to 30% over the next few years. Could this be a potential double over the next five years?
5i Research Answer:
LNR has a good balance sheet, but it does have about $500M net debt, which is about 1X cash flow. We like the company and the low valuation of 7X earnings, and like management. 2023 growth is expected to be above 30%, and 2024 in the 15% range, based on current estimates. We think there is upside here over five years, but in a cyclical industry a double may be pushing expectations a bit.