I typed that wrong so it is meant to say I will not go by what...

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scatterpult

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09/02/16

23:01

Post #: 16981016
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I typed that wrong so it is meant to say

I will not go by what the company hopes will happen in 2021 when that is a long way away

Originally posted by scatterpult ↑

I found the valuation parameters that these analysts Samarth Agrawal and Kanniga Rajamanickam used in this paper to be fairly useless to me. I went through some research before deciding that and I ended up ignoring for reasons explained.
(by the way these two analysts have Indian sounding names hired by ESI India maybe).
I Googled their names to check some of their results ASX and other countries included for 2015. I looked at the market price of the 5 companies they covered in and those prices before and after the analysts published their views through ARROW. I didn't cherry pick any results I just looked on the very top of the pile of Google results. They were Potash West ASX, Highfields Resources ASX, Medusa Mining ASX, Maya Hold and Silver TSX and another from 2014 I think. Anyway I wasn't impressed by the results 4/5 I think were significant losses but there was a slight ramp after the valuations, as anyone would expect if the market was seeing a high valuation. But I hoped the same wouldn't happen to ESI and it did.
After looking back at why, I see they cover spec stocks a bit, that also have low or no earnings yet and so they project up to 10 years ahead based on what the company tells them they hope to be earing and the connections they hope to make and the results they hope to achieve. Samarth Agrawal and Kanniga Rajamanickam do advise that their valuation of ESI "Other than disclosures relating to Arrowhead Business and Investment Decisions, LLC, the information herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete statement or summary of the available data. " Hence my further research into other sources.
Another source I refer to is the importance of EV, enterprise value, something which I don't think can be calculated with ESI. Non Current assest are not liquid (IP for Coldry, Plant Equipment and so forth) and won't convert to cash short term unless they produce current assets like money!
The only way I value this is the way I think the market is currently valuing it and that is risk valued. I deduct 30%-40% of what I think is its fire sale value and look at that as my in. I will do that until it begins to deliver on its promises, I will not go by what the company hopes will happen in 2023 especially when it's projected Liabilities remain unchanged at $5,372,000 up until the year 2021. But theey say their profit will go up from $13 million to over $30 million. That's an unusual thing to achieve. Give me a break.

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I will not go by what the company hopes will happen in 2021

ESI Price at posting: 1.9¢ Sentiment: None Disclosure: Not Held
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I typed that wrong so it is meant to say I will not go by what...

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