Thank you Donksy for sharing your approach to CWN valuation. Whilst sharing your attention to detail and quantitative analysis, I have some reservations about medium term prospects.
Approximately 90% of group revenues and NPAT is derived from domestic operations (FY2013/14 reporting), of which EGP is the major competitor. CWN's scheduled expansion in Macau, Las Vegas and Sydney over the coming years may allow considerably greater exposure to international revenues. However, it is difficult to view either domestic or international businesses as a monopoly.
I shall refrain from commenting on your derived P/E ratio, given that official data is readily accessible. Underlying assumptions aside, if your P/E ratio holds true, then the market value of CWN should therefore approach $35.00 based on the current closing price?
Without doubting macro themes and long-term outlook, your decision to increase weight may well be rewarded amidst a challenging economy and consumer confidence. However, it is becoming increasingly apparent that (local and foreign) government policy, taxation and regulations may yet impact on what otherwise had been a rewarding period to CY2013.
CWN Price at posting:
$12.33 Sentiment: None Disclosure: Not Held
