Actually resource stocks are much more difficult to value than most given lumpiness of cashflows, volatile price assumptions and the need to take mine lives into account (rather than assume a business than continues in perputuity).
In Australia at least, the accepted approach is DCF, not simplistic multiples which work okay in other sectors. A good example being the 1.5B or thereabouts of capex that FMG needs to spend in a few years just to stand still - ignored in spuza's oft mentioned FCF to spot. Although spot cases are also quoted by analysts only as a sensitivity, not as a valuation to trade on.
FMG isn't about to be de-railed. It is a good business with an excellent cost-out story over the past the 12 months.
Now that FMG has it's cost base under control, the share price is about what value an investor should buy the future cashflows at today, there isn't a armageddon event being priced in.
I've seen no analysis to prove that it is "drastically undervalued".
Actually resource stocks are much more difficult to value than...
-
- There are more pages in this discussion • 4,661 more messages in this thread...
This thread is closed.
You may not reply to this discussion at this time.
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Add FMG (ASX) to my watchlist
 (20min delay)
|
|||||
|
Last
$21.41 |
Change
-0.260(1.20%) |
Mkt cap ! $65.92B | |||
| Open | High | Low | Value | Volume |
| $21.52 | $21.67 | $21.30 | $150.5M | 7.000M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 93 | $21.40 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $21.41 | 12657 | 3 |
View Market Depth
| Last trade - 16.10pm 28/06/2024 (20 minute delay) ? |
| FMG (ASX) Chart |