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Ann: Phase Two Wet Plant - Commissioning Update, page-36

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Gnuck

140 Posts.

5

21/12/16

10:19

Post #: 21480350
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Originally posted by Membling ↑

So. Bit miffed with movements, so thought would have another look at current valuation.

Assumptions:
Successful commissioning
Successful uptake of all produce
Iron ore 58-62%
Iron ore sold at quoted price of $52
Iron ore prices at 58-62% as of today in India
Approx 2.3bn shares on issue (all options converted)

Cause cannot be stuffed with a spread sheet at the moment, will be simple PE ratio

Earnings:
Quoted price x production
Todays approx price x production

$52 x 200,000 = $10,400,000
$79 x 200,000 = $15,800,000

EPS = E/Shares on issue

EPS = $10.4m/2.3bn = 0.00452c
= $15.8m/2.3bn = 0.00687c

P/E = SP/EPS

P/E = 0.034/0.00452 = 7.522
= 0.034/0.00687 = 4.949

Average PE on ASX is 15.

I know it is a long winded way of saying NSL is oversold even when factoring in option conversions.

NB: not factoring in option money into SP calcs

Expand

$52 & $79 figures quoted... Is that their profit margin? Don't mean to be Donnie Downer here... But it appears to me you are mistaking revenue as earnings...

Cost of production, head office costs, tax, will more than halve your PE... Or maybe it was PR?!?

NSL Price at posting: 3.5¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

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