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kitale

2,136 Posts.

258

07/06/24

10:21

Post #: 74209815
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Originally posted by Lord Bell ↑

Wingelo ...Fine you do your system of valuation...and after a market crash tell me if your flimsy buy/sell try to do it well approach works ...buying at 5/6 times book value with a positive cash flow and you will live to regret it ..my view is to analyse for "Value and relate that to the price."...why would I pay a price way out of kilter with the actual value of the business.

Naturally you have to look at the projected earnings ..but since most of these projected earnings never materialise as expected or management changes its approach and takes on huge debt you cannot afford to move away from reality..I like to live in reality studying both the Macro and Micro pictures.

No WHC is not a building ..it's a wealth building machine and it's how much it compounds its earnings that drives the machine and that also improves its Book Value .

As I clearly said I would not enter a share at 4/5 times book value ...that activity has no risk control..Nobody likes to pay much more than anything is worth ? all methods of fundamental analysis.

Price is a product of Demand and Supply and this affects all products..If you had read my previous posts I have continuously pointed out that Indian production of steel will rise massively over the next few years and this will be a major driver of the price of met-coal...go and read all I've said before you produce rubbish criticising where criticism is not valid.

Your wish washy attitude of ..and "the business will do the rest" is totally and utterly Naive..."you have to analyse the ability of the business to operate successfully in a competitive environment " ...if you totally disregard this without checking the balance sheet and profit and loss accounts then good luck with your investments you sure are going to need it...

FCF may only last a little while before the operations of the company drives cash flow negative..but your approach is to disregard everything that is behind the creation of Free Cash Flow and assume FCF it goes on forever!!!
No I don't have it wrong ..I do not pay a price well ahead of the value of the business ...and I do not pick businesses that cannot support a FCF...but FCF is only one of the many factors that have to be analysed for the dangers that may lie ahead...despite good Demand / Supply relationships..things can go wrong!!!
My sixty years in investment make sure I don't take anything for granted and operate with caution trying to minimise risk taking.
In companies I invest in I take a very long term view accepting price fluctuations because I am happy with my valuation as a strong support structure ...If price runs away from underlying value ..using asset valuation and value based on projected earnings I don't automatically sell .Return on Equity may still be very high...and I have stressed that WHC has a high return on Equity and a Price still very near Book Value.
Wingelo, you apparently have been very successful investing or trading ...carry on...do what you are happy with...I intend to continue using my methods of analysis using as many skills in Technical and Fundamental Analysis that I have and I can develop.
All the best to All.

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book values are not an area I'm greatly familiar with...but for what it's worth and for those interested i looked up WHC book value over the last 5 years much in line with L. B's reckoning.

MIN 0.3052 OCT 20'
MAX 2 .310 OCT 22'
AV 1.024
MEDIAN 1.050

WHC Price at posting: $8.06 Sentiment: Buy Disclosure: Held
1 Upvote

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(20min delay)
Last $5.47		Change 0.020(0.37%)		Mkt cap ! $4.576B

Open	High	Low	Value	Volume
$5.41	$5.51	$5.40	$19.14M	3.505M

Buyers (Bids)

No.	Vol.	Price($)
1	2559	$5.46

Sellers (Offers)

Price($)	Vol.	No.
$5.48	63661	6

View Market Depth

No.	Vol.	Price($)
1	50	5.520
2	670	5.500
1	6	5.490
1	5000	5.480
1	20	5.460

Price($)	Vol.	No.
5.140	211	3
5.380	289	1
5.450	850	1
5.460	1375	1
5.470	50	1

Last trade - 16.12pm 26/06/2025 (20 minute delay)

WHC (ASX) Chart

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