Australia's largest stock trading and investment forum Australia's #1 stock forum

UNV

Click for more information

0.00%

16.0¢ universal coal plc

News: UNV Universal Coal Responds To Terracom Announcement, page-26

First 26 Last

Share
Profile

Follow
plough

33,577 Posts.

1763

06/03/20

18:18

Post #: 43350280
Share

Originally posted by mrposhman ↑

You can't ignore debt. You can deal with it in a number of ways. For example, lets use Enterprise Value at a calculation of 3 times earnings (seems reasonably though in all likelihood its probably lower).

TER = 3 x $94m = $286m
UNV = 3 x $51m = $151m

Now that looks good from TER's perspective, but enterprise value is Market Cap PLUS debt so to get the shareholders ownership % of that amount, you need to deduct net debt (now UNV have net cash but I won't increase theirs up for now). I think TER's net debt is somewhere around $200m from memory so actually the valuation aspects are:

TER = $286m less $200m = $86m
UNV - $151m

So in essence and being fair across EVERYTHING that both sides of the table bring to the equation (and that includes debt), even at a 50/50 split, this is still undervaluing UNV and overvaluing what TER bring to the table.

Expand

And if you were to use a EE valuation (Enterprise value to Earnings) instead of PE valuation (Capitalised value to earnings ) it really stinks .
Add in TER is getting a higher strip rate each year then it looks to becoming a putrid corpse

UNV Price at posting: 19.0¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

Week 27 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

SKS

SKS Technologies wins US$90M award to supply power to international hyperscale data centre in Melbourne

I88

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

BHP

BHP dips as WA nickel suspended after A$6B hit; losses eased by US CPI and forewarning

NIM

Nimy to raise $1.21M to explore 'newsy' WA targets

Bitcoin investors need to know the risks

AII

Almonty locks in govt agreement for tungsten oxide plant in South Korea

ASX hits all time high out the gate on Friday trades following bullish US inflation data

IMM

Immutep reports strong response rate from immunotherapies treating carcinomas

MDI

Nanocap Middle Island Resources kicks off Barkly copper-gold drill run – a potential IOCG-style NT project

There are more pages in this discussion • 10 more messages in this thread...

First 26 Last

Add UNV (ASX) to my watchlist