If you wanted to be really dirty about it, I would broadly agree with that.
At an all in breakeven price of about $50'ish and a long term IO price of $75 (so $25 margin) gives an NPV of about $14 with inflated IO prices for the first couple of years. So if you assume a long term price of $90 that's a margin of about $40..., but the IO price is above that long term assumption for the first couple of years so that might get you to about $25 - $28 today.
What some galahs on here don't realise is that NPV will drop when dividends are paid out so the big upcoming dividends will be offset by capital depreciation as FMG won't be able to maintain this valuation when current high IO prices roll off and that cashflow is paid out.
FMG Price at posting:
$22.30 Sentiment: None Disclosure: Held
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