So according to this theory, if everything goes ok for AVB and...

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pete11

10,189 Posts.

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23/09/16

17:41

Post #: 19386365
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Originally posted by Kalenn ↑

No, you're not alone. However, there are plenty that have a different view. Including a number of analysts whose reports make interesting reading. They look beneath the surface and see far more value than some.

A brief quote from one sent to me from London:

"Avanco’s peers trade on an average 6.1x 2016E EBITDA multiple, excluding high and low outliers Ivanhoe (IVN) and Weatherly (WTI), using consensus EBITDA estimates for peers and NUMe for Avanco. At 7.0x NUMe 2016E EBITDA of US$10m, Avanco is currently slightly ahead of peers. However, we see two sources of upside here: i) increasing EBITDA exposure from increased production at Antas and ii) production and therefore EBITDA from Pedra Branca. We forecast EBITDA rising to US$31m in 2017 increasing to US$52m in 2018 before rising to US$150m in 2020 after a full year of production from Pedra Branca. Using a flat peer average multiple of 6.1x implies a 2020E equity value of A$0.70/share or an implied 4-year annualised return of 70%. Overall, analysing Avanco from an EV/EBITDA perspective suggests that the current share price incorporates value for Antas, but does not reflect Pedra Branca upside."

Have a great weekend all, go the Doggies! Hawthorn's time is up (I hope).

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So according to this theory, if everything goes ok for AVB and copper prices go to around US$2.50 and production goes according to managements plan, there is a chance in 2020 AVB will be 70c a share?

AVB Price at posting: 5.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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