Unfortunately buying a stock of a PER of over 60 leaves little margin for error, so you need to be sure you are buying a quality growth stock. In this regard, I think DMP is a con-job. You are buying one very good business but two very poor businesses. The Aust/NZ operations earns about $40m or 67% of the groups earnings. This profit is on $150m of assets (about 25% of the groups assets), providing a return on assets of roughly 30%. This is a quality business (but reaching maturity) you would be prepared to a premium PER for, in my view about 25 times - giving a value of approx. $1 billion. This is a relatively rich valuation, i.e. providing an earnings yield of only 4%. The combined European and Japan operations will earn around $20m this year on assets of close to $500m - a paltry 4% of the amount of capital invested. A very poor business by any standards. At the current price of $40.46, the market value of DMP is $3.5 billion. Would you pay $2.5 billion for $20m of earnings? Applying a 15 multiple to the combined Europe and Japan businesses would result in a $300m value, providing a total company valuation of $1.3b - the share price would have to fall over 60% to reach this value.
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Last
$29.94 |
Change
-0.050(0.17%) |
Mkt cap ! $2.722B |
Open | High | Low | Value | Volume |
$29.99 | $30.20 | $29.88 | $9.652M | 321.8K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 15 | $29.92 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$29.94 | 638 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 15 | 29.920 |
1 | 20 | 29.900 |
1 | 180 | 29.870 |
1 | 60 | 29.850 |
1 | 170 | 29.820 |
Price($) | Vol. | No. |
---|---|---|
30.050 | 1873 | 1 |
30.100 | 1780 | 1 |
30.200 | 2000 | 1 |
30.290 | 500 | 1 |
30.430 | 1007 | 1 |
Last trade - 16.10pm 06/09/2024 (20 minute delay) ? |
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