Roy2U and others To get a feel for a share valuation, one has to...

Roy2U and others

To get a feel for a share valuation, one has to make some assumptions about the future EPS trajectory. Of course, it is much more complicated, including factors like dividend payout ratios, rate of interest, risk, et cetera. If we tried to be too clever, we run the risk of being more wrong than would be the case with pragmatic assumptions.

For starters, one could:

1. Pick an EPS for FY20, and work from there using fixed YOY growth.
2. Similar to a) but then decide what FY21 might be too, and apply YOY growth to FY21.
3. Similar to b), but decide the EPS metric for more years.

However, I would advise anybody attempting this to first read the H1FY21 presentation – see https://www.creditcorpgroup.com.au/media/1520/credit-corp-group-fy20-h1-results-presentation.pdf

I am loath to make any more suggestions on the above, because I would like to see what others think. I suspect that I am going to end up with a string of valuations at different points in time in the $20 to $30 range.

For now, I am in no hurry to sell any CCP, but I do need to sell something in June for three reasons, taxation, the mandated amount I must pay myself from my SMSF, and to return funding to my mortgage account that I had used to punt on CCP and NEA.