5 cents is about the correct price. If you assume your cost of capital is 8% pa for the 5 years then 13.5cents in todays money is the equivalent of 20 cents in five years. So by paying 5cents now and 20cents in five years time (which is 13.5cents in todays money) your saying the shares are worth 18.5cents today. Given the leverage you get and that fact that it is 5 years away (anything can happen in 5 years) the premiun you are paying (1.5cents on todays closing price of 17cents) is not bad.
So all up 5cents looks fair to me but I refuse to buy them as it only ecourages the buggers to do it again.I also would prefer to trade with other stock (not that I trade much). I will sit on the fully paids and review in June (for tax reasons and performance of stock).
I enjoy your posts blokes so keep on punching. I think they have turned the corner and with a bit of luck they will start performing soon.
PBI
premier bionics limited
