AML Foods Limited

A quality, cash-generative Bahamian food retailer that looks cheap through either lens. To a global investor pricing the full Bahamas country risk premium, fair value is about $10.71 against a $9.00 price, roughly 19% of upside. To a domestic investor, who cannot invest abroad and so prices against a Bahamas government bond rather than a US Treasury, fair value is about $21.43. The gap between the two is the country risk premium, and nothing else moves the number as much.

1. Two lenses, one country risk premium. To a global investor charging the full 5.13% premium, fair value is about $10.71, roughly 19% above the $9.00 price. To a domestic investor who prices against a Bahamas government bond, it is about $21.43. The entire difference between the two is the country risk premium.
2. The premium is the swing factor. At 5.13%, the country risk premium is close to half of the global cost of equity, so fair value moves far more with the Bahamas-risk assumption than with any revenue or margin input. Remove it, as a domestic buyer effectively does, and the value roughly doubles.
3. A quality business, cheap on either lens. Returns on invested capital run well above the cost of capital, so growth creates value. Even to a global investor charging full Bahamas risk, AML is about 19% undervalued, and to a domestic buyer far more.