I dont think i am intelligent but the buttom line is after the SPP has concluded BLY would be debt free.
So we are lookning at company with 4.3 billion shares on issue. If i am not mistaken next years earnings will be around about 110m US which is 130 million Aud, That equates to 3 cents per share. If we price this stock at 15 times forward earnings which i think is reasonable given its Bal sheet it should be worth around 45 cents ATM.
But the beauty of this stock is that they will not have any interest expense for the 700 million dollars of debt they have paid down. Add that to the cost savings that they have implemented throughout 2009 will we see exponetial growth in earnings in 2011 and 2012.
Given that commodities are expected to have another crack at it and the easing of the credit markets earnings of 6 cents in 2010 and 8-9 cents in 2012 is no too difficult it acheive. with a PE of 15 8-9 cents equates to a price of around $1.20-$1.35.
If this stock id not a LT buy I dont know what is
IMO with no debt we got nothing to lose anyway
BLY Price at posting:
$2.75 Sentiment: LT Buy Disclosure: Held
