If you use the Roger Montgomery intrinsic valuation formula that takes in account the pay-out ratio and ROE compounding over time you get an intrinsic value of $3.75 with the following assumptions:
Equity per share = $0.67
Return on Equity = 27% (lowest in the past 4 years)
Payout ratio = 60% (roughly what the company has been paying out on average)
Required rate of return = 8% (market return over time, could be reduce with lower interest rates)
Disclaimer: There is a weird growth number he uses to compound the ROE. RM claims that he has statistical evidence but refuses to release it. I much prefer to do DCF valuations but I like playing around with other peoples ways to calculate valuation for fun.
Will price go to $3 after merger ? AFG, page-112
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Last
$1.38 |
Change
0.030(2.23%) |
Mkt cap ! $372.3M | |||
| Open | High | Low | Value | Volume |
| $1.36 | $1.38 | $1.35 | $357.6K | 261.8K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 3 | 3094 | $1.37 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $1.38 | 3284 | 1 |
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| Last trade - 16.10pm 09/07/2024 (20 minute delay) ? |
| AFG (ASX) Chart |