Ann: Market Update - Management Rights for Olam O, page-11

re: Ann: Market Update - Management Rights fo... Regarding valuation.....the results I think, 05 and 06 relect SHV's significant leverage to the 'water cycle' and 'almond price cycle'


Rainmaker, taking what I consider a conservative approach I've considered the results for 2009 for the food division and management services (after allowing for a margin squeeze) and the 2007 results for the company owned orchards.

On that basis I figure EPS (excluding the Timbercorp bad debt) of 50 cents is a reasonably conservative base going forward. With a pe ratio of 12 that equates to a share price of $6.

Funnily enough I thought SHV was undervalued this time last year and in my calculations on that occasion I also concluded that a return to at least $6 within a year or two was feasible, prompting me to top up my holdings at just under $3.