Barkston. Yes DCF (NPV/IRR) has been the cornerstone of my investment valuation for many years. However I have noticed in recent years that this method is increasingly less applied to companies in the resource sector with MC > A$1b. I track all ASX Au producers and in nearly all cases the SP is substantially in excess of their NPV (ORE Reserves only). Their SPs are no longer constrained by a NPV calculation. It is still applicable to smaller companies during their DFS process and the early production years but more and more I'm seeing FCF used as the key valuation measure. FCF is similar to NPV without the present value calculation. Also the low interest rates set by central banks around the world has diminished the utility of the NPV calculation.
Out of interest my FMG NPV (6%) on Ore Reserves is US$6.29 per share or A$7.87 per share. Vey similar to the other valuation techniques and unusually so.
Barkston. Yes DCF (NPV/IRR) has been the cornerstone of my...
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$17.34 |
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Mkt cap ! $53.38B | |||
| Open | High | Low | Value | Volume |
| $17.31 | $17.51 | $17.00 | $309.6M | 17.18M |
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| No. | Vol. | Price($) |
|---|---|---|
| 1 | 300 | $17.33 |
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| Price($) | Vol. | No. |
|---|---|---|
| $17.35 | 28897 | 5 |
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