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27/11/15
20:07
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Originally posted by Mightyatom
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That is looking at it through a bias eye. Anchor and adjustment heuristic, the price today is 'x' therefore I base a best scenario price as a movement from $0.70.
The problem with this $0.70 is it not a realistic base to use as an anchor. A more appropriate anchor is $6.30 approx the right issue price. If it meets guidance and delivers a convincing strategy with outlook then there is no reason why value will not be as it was back in May - that being future cash flows discounted back to that point.
It is a real challenge to get one's head around that though. The reason? Its nothing to do with the company but everything to do with an irrelevant factor - the liklihood of this being a 10-bagger from here within a year.
If everything turns out to be as it was supposed to be there is no reason why it cannot return back to a pre-decline share price.
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Mighty, don't you think a price target of $6.30 is being a tad optimistic? The UK proposal to cut SGH's whiplash claims from 95% of their "core business" (excluding hearing loss) to 0 is what worries me.