- Summit's income statement does not represent the true underlying earnings due to tax benefits.
- The free cash flow remains very strong as the sustaining capex is tracking at just half the depreciation expenses.
- This means the free cash flow will continue to outpace the net income, and I expect an FCFPS of $1.50 this year.
- The market seems to be ignoring the strong free cash flows, and I'm also getting interested in Summit's debt which has a 4.8-5.1% YTM for 4.5-6.0 years.
For further details see:
Summit Materials: The Free Cash Flow Will Allow For Rapid Debt Reduction