I reckon the ultimate value of any company is determined by its future earnings, or more precisely, determined by DCF (Discounted Cash Flow). This is why the value is usually a multiple of earnings.
If a company's business/earnings got into trouble and had to wind-up, then the above "cash flow" in the DCF can be replaced by the proceeds (also a form of cash) of selling the assets of the company. This is why we have also valuation methods such as NTA.
Now, SHV's underlining earnings would be 25c/s for this year, 7c/s for the 2H (also as Craft first calculated), and deminishing, the value from the earnings estimate might be very low ...
So we turn to the asset valuation ... But I am still pessimistic, as the asset value is also ultimately determined by its profitability ... If it can't make a profit, it has no value ...
SHV Price at posting:
$2.23 Sentiment: None Disclosure: Not Held
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