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54.5¢ slater & gordon limited

Ann: Market Update CEO Announcement and General Law Review, page-88

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Braintot

720 Posts.

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18/02/18

11:34

Post #: 31136527
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Originally posted by tim8wilson ↑

Hi Jim,

I haven't been paying much attention to SGH lately so perhaps I'm behind the times, but looking over the KPMG report you linked at the top of the thread table 25 on page 94 seems to imply that the $0.30-$1.10 valuation is based on earnings multiples of 4.75x - 5.25x. These are very conservative multiples though that's understandable given the circumstances of the company and the role of KPMG, that they would be careful.

I just did a half-assed reverse engineer of KPMG's workings (using "high" case of maintainable revenue and margin) and substituted a multiple of 12x. This returned a valuation of $3.60 per share.
While SGH is distressed right now it will eventually move beyond this. It seems very strange/suspicious to me that the CEO is pouring cold water on the share price. Either HY results are going to be a blood bath, or something fishy is going on.

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"Either HY results are going to be a blood bath, or something fishy is going on."

I suspect that there will be a blood bath AND something fishy is going on.

SGH Price at posting: $2.61 Sentiment: Sell Disclosure: Held
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