Your fair value estimate equates to some pretty whacky valuation metrics. For example:
Column 1 Column 2 Column 3 0 $2.00 $3.50 1 Current P/E 1.76x 3.08x 2 1-yr forward P/E 1.30x 2.28x 3 Current div yield (fully franked) 28.50% 16.29% 4 1-yr forward div yield (FF) 38.20% 21.83%
If I ever get the opportunity to invest in a company of similar quality and growth prospects as REA at the above multiples/yields, you can be guaranteed I will be mortgaging the farm, selling my house, my car, my comic collection and putting every spare penny I have into it. Because $2-$3.5 would be the investment opportunity of a lifetime.
Although, I can say with a very high degree of certainty, that you won't see that price again. It would take an absolute catastrophe for the company to fall to $2-$3.5, an event which neither you nor anyone else could possibly forecast.
Which leaves me wondering, how did you get to a FV of $2-$3.5, as your 'optimistic' valuation? At <8% of the the market valuation, your valuation appears unreasonable. I'm thinking either you have an unrealistic return hurdle or your valuation methodology/inputs are incorrect. Maybe you could post your workings to support your $2-$3.5 fair value??
Regards
Gralynchett
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$209.93 |
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Mkt cap ! $27.73B |
Open | High | Low | Value | Volume |
$208.03 | $210.48 | $205.25 | $27.48M | 131.4K |
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No. | Vol. | Price($) |
---|---|---|
1 | 10 | $208.90 |
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Price($) | Vol. | No. |
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$210.00 | 215 | 2 |
View Market Depth
No. | Vol. | Price($) |
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5 | 910 | 227.030 |
1 | 2 | 220.620 |
2 | 2325 | 220.420 |
1 | 25 | 215.000 |
Price($) | Vol. | No. |
---|---|---|
169.000 | 87 | 3 |
199.440 | 30 | 2 |
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