Thanks for sharing the DCF - certainly neat and simple (I work with NPVs and IRRs on a daily basis, so can always appreciate a neat model).
Just offering some of my thoughts -
1. The same risk factor is applied for US and non-US. I'd retain the 49% for non-US, but apply a lower percentage for US. This is given the FDA's current stance to IXC's trial design, which any smart buyout firm or pharma company would leverage to reduce the takeover offer. I'd certainly be recommending this to my CEO / BoD if running the financials for an IXC takeover. On this basis, fair value is likely closer to the $3 range.
2. While DCF and 'comps' suggest a tremendous gap between current share price and fair value, I don't see investors jumping in for at least another 12 months given the interest rate regime change (eg 4.6% for 6 month t bills). From a personal standpoint, I'm sitting on much more cash vs 6-12 months ago, but will continue accumulating parcels of IXC for myself and the family.
IXC Price at posting:
54.0¢ Sentiment: Buy Disclosure: Held
