Forum Archive Index - July 2000

["Mark Hubbard" <mhubbard@es.co.nz>]

-----
From: Peter Maiden <pmaiden@today.com.au>

> Based on NZ earnings alone my own DCF (at a modest risk rate) is 520-550
per share. Add to that acquired Aust earnings at a higher risk rate over all
DCF is in excess of 900.


I like your analysis Peter, but IMHO your DCF valuations are too high,
especially the $9.00. My own DCF valuation, including Aussie (which remember
Tindell has stated will only slowly increase earnings per share) is a value
range of about $4.90 through to $5.20.

To get your values you must be using quite a low discount factor, and I
suspect earnings growth of over 20% for the next 10 years. The company has
managed earnings growth of 21% average over the last 7 years, I think for
them to continue that now for the next 10 years is unrealistic. I suspect NZ
is almost saturated (this is where our opinions mainly differ I suspect) -
also, remember that low NZ$ and the coming ERB (which for me, given the
young staff, increases the discount factor that has to be used).

Of course only time will tell which of us is right. It will be interesting
to get others opinions.

Cheers


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.