Ann: Change in substantial holding, page-43

Need more of a refresher to my uni days, but I think the dividend growth model may or may not be the best tool to value a stock. Firstly and again it's been a very long time, the assumptions made:

-assuming that growth is perpetual (surely it'll stop somewhere)
-does not factor in time value of money
-it's too sensitive to the dividend paid
-does not factor in FCF and debt
-the required return on equity needs to factor in capm and what is the beta for sgh I have no idea, but I think roe will be quite high for a risky stock.
-it's a very simple calculation and any changes to the variables will greatly affect the calculation

I'm almost treating sgh as a gold stock, and their ability to generate cash (dcf) and how they service their debts, and payback period. It's a more conservative approach then normal eps valuation, and my target is more ~$6, if I use eps then it'll be more $8.

Either way I think we both agree at $3 it's undervalue, and if there is some weakness in share price tomorrow I might top up a little, I don't like to use my margin loan, but maybe.