Hi - great broker reports!When the market wakes up and realises...

Hi - great broker reports!

When the market wakes up and realises TFS (TFC.ax) is no longer dependent on MIS sales there will be significant and ongoing rerating of TFS upwards of $5.00/share (medium term) in my opinion (PE 10 -15) – significant earnings growth + PE expansion from current very low levels = rerating!

Wise Owl valuation revised to present value of $2.73 with the development of institutional sales of non-MIS together with the first year of oil sales in 2013. 12 month estimated price target for shares of $1.58 with significant potential upside!

JP Morgan price target - we increase our price target from $1.67/share to $1.76/share, dated July 2010

Wise Owl summary points:

The basic fundamentals of the company remain unchanged and provide a COMPELLING CASE at these levels. The sale of non-MIS will provide a more secure cash flow for the company that will not only aid greater liquidity and transparency in the secondary market but create an entry point to the global market

Key points:
TFC.AX remaining on track to achieve world dominance of the sandalwood market!
TFC have proven the business strategy to move away from its heavy reliance on MIS is beginning to pay dividends especially under testing times.
Earnings growth. Net profit growth of 44% to $34.9m on the back of revenue growth of 50% to $94.9m
Feasibility study commenced on the manufacture and distribution of pan (mouth freshener – containing sandalwood oil) products in the Middle East North Africa (MENA) and sub continent region (India and Pakistan) with an estimated market size of $15 billion per annum!
Based on wise-owl.com forward earnings estimates, a 12 month target of $1.58 is reached using a conservative earnings multiple of 7 times. If this multiple was increased to 10 times, an estimated target of $2.25 is calculated, highlighting the potential upside in the stock price
The price earnings (PE) multiple of 6.5 times as of June 30th along with the forward PE estimate of 7.4 suggests a potential re-rating of the stock. As TFC moves away from the traditional heavily discounted agricultural MIS sector, ITS TRUE VLUE WILL BE REALISED!

JP Morgan investment summary:

We expect TFC to continue to hold up well in a market that has seen many of its peers suffer. We believe there are numerous reasons for this. 1) TFC’s balance sheet remains strong providing the company with opportunities for acquisition and land sourcing, 2) market share has increased considerably on the back of key competitors 'exiting' the market and 3) TFC's product has an attractive real rate of return on its product, clearly placing it at the upper echelon of both MIS and wholesale product offerings.

We remain Overweight. Price Target we increase our price target from $1.67/share to $1.76/share, dated July 2010

September 2009 Wise owl
http://tfsltd.com.au/library/file/research-reports/TFC%20Update%20August%202009.pdf

August 2009 JP Morgan
http://tfsltd.com.au/library/file/research-reports/TFC_JP%20Morgan_090916.pdf

All broker reports:
http://tfsltd.com.au/shareholders/research-reports/

Small Diamond