Thanks Arrow for that snip. Can I guess a multiple of 8 is allowed now for Zenith. They have changed their operations to almost all BOO. If we do 8 x 30 mill we have $240 mill as a fair price - not the $150 mill offered. I do note the debt is much higher at Zenith. But as you said, that makes Zenith a sweet target for private equity money looking for a place to earn eps.
So, maybe we go very conservative and to 7 x $30 mill = $210 mill for 2020. I did note you had $1.40 as a fair price. I dont know where one puts in the risk discount or how much.
A telling fact to the $1.10 being unders is that: 'just try to find a comparable place to invest your $1.01'. After tax eps for this year alone will be about 5.5%. If they just started to give out 5 cents per share franked dividend, what would the share price be. And can just do a dividend reinvest plan to not lose out on capital.
Interestingly, us shareholders are required to get a 'it is fair' analysis from the likes of Grant Thorton. Do you think any analysis right now could say the offer is fair to non-rollover holders? I will be very interested to read what analysts say.
But all said and done, I dont want to lose site of the forest for the trees. The forest is Zenith doing what Zenith does with its forest green logo. The trees are these fun and games of who will like to buy - and at what price.
My God was kind enough to get my brain to focus on this Company. And when I read about them and chat with them it all appears very clear and focused. I need to retire one day and if this becomes a buy out, it will be my retirement house. If it does not get bought out, then the dividends over the next 20 years will be my retirement.
Now in my recent bible reading I find it is unwise to not diversify. So I feel I have been unwise to 'gamble' as I did. But it has worked out wonderfully. But it is still a gamble, I guess. For example, I had a wee investment in GNX, which I have just sold in my SMSF. (I need that 20k the govt will let me take out, since my job is in the travel industry, and is corona affected). My point: I loved the thought of pumped hydro. But lo and behold, we now learn that the govt reports promoting pumped hydro understated the capital costs by 30%.... AND they forgot about the grid implications of having all your power generated in one place(s). And they OVERSTATED the cost of battery storage. I will link the article I read this AM.
re Zenith, it means a BRIGHTER future. Graham's IP is such that we have gas and solar with no battery needed during the day. But when batteries become cheaper, it just opens market MORE for Zenith. Zenith can provide more power (battery for night or 24x7 ops). Clients get power cheaper.
Now I can get my mind onto the value add electrolysis power needs. No need to send, for example, raw materials only to China. If we have POWER on tap in remote regions, you simply (pre)process the raw materials as needed. Australia can value add! As long as they have affordable power. Well, there aint no pumped hydro in the bush, but no problem putting some batteries. Graham and Peter and Doug and Hamish will eat that opportunity up.
And I love the slowness of the movement and opportunity. Like I said many times.... $2 in three years and dividends and growing. Not fast paced, but sexy enough for me!
https://reneweconomy.com.au/big-cost-swings-point-to-more-big-battery-storage-less-pumped-hydro-57368/
