plenty of upside: shaw's report, page-2

Hi splain,

Thanks for that, it certainly has been a "transformation of market perception" for this stock. It just shows what happens when a broker or two accept the story and get behind a stock.

With respect to the options I do not agree the AMUOB's are overvalued with respect to the AMUOA's or the fpd share price for that matter. The market has it about right. While there is still time to run it is all a question of leverage

ie if you believe the stock could be valued at 65c a year out into the future then the oppies still offer leverage over the shares ie

AMU 65 / 29 = x 2.2
AMUOB 40 / 9.5 = x 4.2

Compare with say GTMO which I reckon are overvalued. "A scale up" of share price and exercise price based on current prices gives

GTM 10.5 scaled to 29c
GTMO 4.0c scales to ~11.5c (exercise scaled to 25c)
(versus AMUOB equivalent of 9.5c) and GTMO only have 9 months to run versus AMUOB 14 months)

Or to put it another way if GTM are double the price in say 6 months to 21c the GTMO with no time value left would be 11c offering leverage of only 11 / 4 = x 2.7

If GTM is the same price in 9m GTMO will be worth 0.001c (ie nothing). If AMU are the same price in 9 months, still having 5 months to run will be trading at around 5c.

I guess it all depends on market perceptions of possiblilties, but no, on balance as I have tried to explain the relatives for AMU, AMUOA and AMUOB appear more than fair. If anything, if the market had the same perception of AMU as GTM, based on the price of GTMO it would be trading them relatively higher (ie 11.5c).

pj