FRG - Buy Franchise Group At 7x Forward FCF For At Least A Double

• Franchise Group has conservatively guided to $3.35 2021 EPS and strong growth for years to come. Actual run-rate earnings will exceed $4 in 2021 and $5 in 2022.
• Leverage is plunging rapidly, from 3.4x now to 2.4x by year-end 2021, and 1.9x by the end of 2022.
• A rapidly growing company with 1.9x leverage should have a PE in the high teens at least. The stock price will benefit from rapidly growing earnings and a rising multiple.
• Management has a stellar track record on M&A, and there may be more to come.
• The company has evolved enormously through M&A over the past few years, leaving many investors confused. As that confusion clears up, the stock should re-rate aggressively.

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