Ann: Profit Guidance-TGA.AX, page-69

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crazypunter

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25/05/16

17:39

Post #: 17865791
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Originally posted by Pioupiou ↑

Morningstar had forecast that the Preliminary Report would be published today, 25/05/2016 – see http://www.morningstar.com.au/Stocks/CorpCalendar. It flagged this date with an asterisk to indicate that this forecast was “based on the last lodgement date for this event”. By “last” I assume they mean what happened last year. Anyhow, whatever Morningstar meant, the fact remains that the date was only a guess.

On the matter Morningstar's valuation changing from $1.689 to $1.741, the change is so small that it could have been caused by using a different rounding procedure, or slightly changing the IRR used because the interest rate moved down slightly. The Morningstar Analysis Estimates are:

......... 2015 .. 2016 .. 2017
EPS ... 21.8 .. 21.6 .. 24.4
DPS .. 11.8 .. 12.0 .. 13.0

From these figures one could easily derive valuations above $1.741, especially as 2016 had a $2.8 million provision to cover the historical overpayments by clients going back twenty years. To skip from the 2015 EPS to the 2017 forecast EPS requires a growth rate of 6.3%, which is not shabby. Ben Graham suggested a P/E of 8.5 for a zero growth stock, so if we used that we would get a bit above $1.80, depending on what we used as the base line. I would be inclined to use 21.8c x 1.063 = 23.17c, which gives 8.5 x 23.17c =$1.97. Suffice to say, somewhere between $1.80 and $2.00.

When I have read the report, I'll create a new valuation guesstimate for myself.

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Pioupiou- could you post your valuation as soon as possible tomorrow .

just one word of caution- the drop in % terms from $1.80 SP to $1.44 is far less than the required % gain from $1.44 to $1.80.

in other words-it would have to be a monumental game changer of a report .

cheers crazypunter

TGA Price at posting: $1.45 Sentiment: Sell Disclosure: Not Held
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0 Great analysis

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