Just thought I'd bring this up again...have updated some expectations I have for the company going forward.
Using ROE to calculate Intrinsic value, assuming a ROE of 7.5% and a required rate of 12%, and finally a payout ratio of 66%, I come up with an rather conservative valuation of 52cps. Thats based on expectations of just under 5c eps.
I do use slightly different methods to value ROE than others, but I find it gives me a better idea of real ROE. Whether SSM can achieve a ROE of 7.5% this year is yet to be seen, but my required return of 12% could be considered conservative.
IMO current prices are at a significant discount to my calculations of intrinsic value. The key here is whether SSM management can prevent any further "one off's" that destroy shareholders wealth and the value of this company.
SSM Price at posting:
32.9¢ Sentiment: Buy Disclosure: Held
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