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29-10-2017, 09:38 AM
#2061
Originally Posted by MARKETWINNER
For me taking part of its business entirely depends on the new development and value. Serious investors or mangers have very long term plans. They create long term share holder value for faithful investors. If a company is not running well, not straight forward and they don’t have any long term plan it is wise to sell their stocks as fast as we can. In addition, once stocks become overvalued, eventually they will go down in bear markets.Any price-sensitive announcements have already been factored into the stock’s share price. This is no longer a value share. It is trading above intrinsic value.
I can't agree with that marketwinner. The 'fundamental' value based on their stated earnings, with appropriate risks/probabilities factored in, is a lot higher than the current share price.
That's based off a DCF cashflow model, with a 'perpetual' growth rate of 0% after 10 years (ie, conservative estimate). Discount rate used is not too small either. My estimate of value is around $6 a share.
Even if my value is wrong, most cashflow-based valuers would say the underlying value is more than the current share price.
What is your methodology for saying intrinsic value is less than the current price?
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29-10-2017, 11:11 AM
#2062
Valuing growth companies using DCF is easily distorted as many have capex intensive growth schemes in place to drive earnings growth over short-medium term that level out once the maturity curve is being reached.
Valuing this one using earnings growth estimates of 44-52 NZDm in 2020 ( 17-19%CAGR )
This presents a PEG of 0.90 at current SP - rather cheap growth and it comes with a 4.2% net yield that will grow more or less inline with earnings.
Anything under $6 seems like a fair price to pay in my opinion...
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29-10-2017, 02:08 PM
#2063
Originally Posted by hardt
Valuing growth companies using DCF is easily distorted as many have capex intensive growth schemes in place to drive earnings growth over short-medium term that level out once the maturity curve is being reached.
Valuing this one using earnings growth estimates of 44-52 NZDm in 2020 ( 17-19%CAGR )
This presents a PEG of 0.90 at current SP - rather cheap growth and it comes with a 4.2% net yield that will grow more or less inline with earnings.
Anything under $6 seems like a fair price to pay in my opinion...
Hardt, I agree! In a growth company like THL, dcf methodology will undershoot the value, although it can be factored in to whatever model is constructed; I like to think I've allowed for that.
Either way, we seem to both agree that marketwinners comment that THL was trading above intrinsic value doesn't sound correct. And sounds like you agree on a fair value estimate of at least $6...
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29-10-2017, 03:16 PM
#2064
Last edited by Valuegrowth; 29-10-2017 at 07:03 PM.
Reason: to add another link
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29-10-2017, 04:50 PM
#2065
Originally Posted by MARKETWINNER
Easy peasy eh .... if it’s that easy i’d Say the intrinsic value of thl is about $4.92
But I’ll sell if offered 6 bucks
Last edited by winner69; 29-10-2017 at 04:53 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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29-10-2017, 06:59 PM
#2066
Originally Posted by iceman
And how you calculate it ?
https://simplywall.st/news/2017/10/1...zsethl-growth/
Have Investors Already Priced In Tourism Holdings Limited’s (NZSE:THL) Growth?
https://www.wikihow.com/Calculate-Intrinsic-Value
Five Methods
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29-10-2017, 07:23 PM
#2067
Originally Posted by MARKETWINNER
So $4.08 it is - some 20% lower than my $4.92
Must use different assumptions ...or that analyst forecast they use is pretty useless.
I’d sell if offered 6 bucks
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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29-10-2017, 08:00 PM
#2068
It has a long term potential .We have to rely on our own reliable valuation models. In each valuation models there are plus and minus.
Higher valuation should be given to fast growers, cash rich and less debt companies. They are safe as long as they have long term growing businesses. However, that doesn’t mean buying them at very high prices. In other words future strong balance sheets have more value than future weak balance sheets.
http://www.easyaccountancy.co.uk/smallbusinesscentre/how_to_value_my_company.html
Last edited by Valuegrowth; 29-10-2017 at 08:03 PM.
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29-10-2017, 08:58 PM
#2069
This talk of $6
Would give an Enterprise Value of about $900m ....hmmm ....that sort of value needs some pretty hefty cash flows to be justified
Maybe MARKETWINNER has a point
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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30-10-2017, 08:11 AM
#2070
Originally Posted by winner69
So $4.08 it is - some 20% lower than my $4.92
Must use different assumptions ...or that analyst forecast they use is pretty useless.
I’d sell if offered 6 bucks
That is a USA article, so treat the $4.06 as US$4.06
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