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clock Created with Sketch. 31/03/21
23:12
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Originally posted by Joffrey:
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Its tough making predictions about Covid and consumer milk habits. I tend to focus on what's already happened and use that as a reference point. Before Covid A2M did 50 cents a share for the FY 2020. If you assume that result and return 10 years worth of earnings to investors its $4.49 using a 2% discount rate (no need to use a hurdle rate above the rate of inflation). I would also add the book value given this is a company that can do 30% ROE. 1.43 + 4.49 gives $5.92 which is a present value covering 76% of the current share price.
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I don’t think it matters too much what is said here, sooner or later the big players are going to try and recoup their losses and start pushing the price back up, it may not get back to $20 anytime soon but see $13-15 by the end of the year
(20min delay)