Originally Posted by
Beagle
Remember when we both bought into this at the bottom of the last cycle in August 2016 at $2.70? Profit we were looking for in regard to FY17 was $20m which gave eps of 33.5 cps (PE of just 8) and we were drawn by the projected 15% gross dividend yield.
How the market thinks its now worth $4.15 with the currency about 10 cents south of where it was in 2016 and all the ongoing uncertainty of how this will recover from Covid 19 and over how many years is a mystery to me. Even if this was presently $2.70 I would suggest our original purchase on those metrics contained far less risk.
I think the point is this only looks cheap to those who are referencing a $6 price viewpoint. If one changes their frame of reference this looks super expensive for the risks involved.
Maybe they get back to earning $20m in FY22, maybe its FY23 but in the meantime ? How many years before we see profit back at where it was in FY19 ?