re: go go go gold.....!! make me proud...! MonogamyI hven't had...

re: go go go gold.....!! make me proud...! Monogamy

I hven't had a close look at CSL's results since they reported...but from memory i remember a figure around 30/40c for the half year... i don't think this figure included any significant writedowns... thus it is an appox proxy for operating performance.

Unsing this figure, we get earnings for the full year of less than $1.00..thus placing on an earnings multiple of 15x or higher.

What must be remembered however is that:

1. There must be a considerable goodwill amortisation expense on these earnings, thus the cash earnings should be higher.
2. They spend approx $100M on R&D annually... if they were to seize this expenditure, they earnings would be twice what it is now.

Having said this, i can't see there being any significant earnings drivers in future.

I see the Franc continuing to appreciate relative to the USD, and the same for the AUD. Thus CSL is likely to continue getting hit on currency translation in future periods. Additionally, i don't see the IVIG prices picking up any time soon...infact i feel they could fall still further in the key US market.

SO in summary, CSL may be atractive on a long term basis when one considers the amount they spend on R&D annually, however, i see there being continued pressure on earnings in the medium term, which can't be positive for the share price.

Additionally, their div is a paltry 2% or so....


CSL will start looking attractive below $10 imho. I wouldn't be buying it above these levels simply because there are question marks over the value it provide at these levels... and there are better alternative investments available that offer equal if not better upside potential with much less risk.