80cents to 1.10 vale on pes 5 to 7 pon 30k

wrote this not long ago.....have another read.

***SENTIMENT WILL PUSH PRICES DOWN FURTHER IN SHORT-TERM TILL IT IMPROVES, BUT HERES THE FUNDAMENTALS

EPS 15.95 on pon $14/llb!

PE 5 = 80c

PE6= 95.7

PE7 = $1.12

this is my extrapolation based on capmans figures for revenue, costs and share capital.

heres the post ....................

" LOOK HERE and tell me who has NFI!

Capman did some figures below and then I extrapolated on them in the next couple of posts

capman wrote:

" US$19 per lb = AUS$23.75 per lb (ex rate 0.8)

AUS$23.75 = $52,250 per tonne

agm recieve 70-75% of the spot price. lets call it 70%

spot price (us$19/lb) AUS$52,250 x 0.7 = $36,575.

agm producing 8500t per annum (5700 in 2007-08 due to production being 8-9 months which is possibly where commsec got there eps)

8500t x $36,575 = revenue $310,887,500

all up cost $65 per tonne.

900,000t x $65 = $58,500,000

revenue less expenses = $252,387,500

tax rate 30%

$252,387,500 - 30% tax = NPAT $176,671,250

say shares on issue 750,000,000

$176,671,250 / 750,000,000 = 23.56c per share

it's not fancy and wouldn't be bankable but gives an idea of earnings.

you can try it at $14/lb

cheers"

In the next coupla posts i extrapolayed on his analysis using $14/lb which is 0.74 of $19/llb (thus I took 0.74 of total revenue minus the fixed costs and divided by shares+options)

I got 15.95cps using $14/llb

Im being REALISTIC guys

what PE would you assign to 15.95cps???

Id say 5 or 6 FOR NOW.

Yes once production starts and talks of RAMP UP of production by management start to take centre stage, id assign a higher PE given the GROWTH profile

so 15.95 * PE 5 = appx 80cents

15.95 * PE 6 = appx 96cents

so 80-95cents for now (min and maximum FAIR valuations IMO)

If the share price falls below 80 Id say BUY

If the share price gets above $1 atm Id say lighten and keep CORE holding.

SENTIMENT may drive the price lower in very very short-term, but no worries , if that happens, i reckon accumulate. SENTIMENT (very positive bullish sentiment) drove the price over $1 and thats above my maximum limit indicating overbought FOR NOW.

LONG-TERM your CORE holdings should do fine

Look at PEM for an excellent example. Or kagara. Both got SMASHED when zinc went down, but look where they are now that NEGATIVE SENTIMENT has gone away!

Never buy TOO MUCH of a share if youre not a multi-millionaire, otherwise youll always be paranoid about protecting your profits when the market sentiment doesnt go your way!

Fundies lighten but dont care bout core holdings.

Many ppl on hotcopper are gambling and looking to get rich by buying a tonne load of one share.

huge risk = great stress and paranoia if youre not financially made and can afford to lose some paper profits and not care.

thats why i never buy too much of any one share. Id only buy a tonne load of one share if it only scratched a small percentage of my wealth if the investment went against me.

thats the problem with HC - everyone wants to get rich fast and dont really acknowledge that the norm is 6.25% over one year. If you make 30-40% from stocks youre laughing per annum.

idi@ts like gann45 laughed and said to me to go visit the XJO thread where he was making 40% in a couple of weeks.

Well I went there and 90% of em take 5 positions or more a day and usually give back everything they make

im happy with 30-40% a year and if youre not, then youve got NFI re economics cause 30-40% is stretching it by a mile too.

HC, just full of greedy gamblers whom need a reality check in real world economics which suggest the return theys seek are ridiculous. "