Has anyone done any work looking at relative valuations? I've...

Has anyone done any work looking at relative valuations? I've focused on DCF, but the penny just dropped that that's only going to give me what I would consider sane buy prices, and the market typically prices things far more aggressively. So I'm wondering about relative valuations.

The only two I can think that might be somewhat demonstrative for LPD are AGY and ORE. I know that they're brine producers, but I think LPD being a direct LC producer bears more similarity with them than it does with the spod producers.

As far as I can tell, ORE are producing about 11,000 tonnes a year, at a margin of about $7,000/t, for EBITDA of about $102m. Current market cap of $1.5bn means they're at a current P/E of 15. Now some of that is going to include value of their expansion plans, which will take them up to 28,000tpa. Impossible to separate that out, but it makes it a useful snapshot for what LPD might look like between P1 commencing production and P2 being built.

That's a pretty reasonable P/E, really, so if you were to assume LPD will earning $120m per annum from P1, then you're looking at a market cap of $1.8bn. P1 will only be producing 5000-6000 tonnes, but it will do it at more than twice the margin, so LPD would still be bigger based on the same metrics. If there are 3.5bn shares outstanding by then (assuming a capital raising for P1), then that's $0.51 fully priced, some time in 2020.

Looking quickly at AGY, they're about to start producing 500 tonnes a year, and then go straight into expanding to 1500 tonnes. They're currently at a $293m market cap and I honestly don't know how. If you assumed they earn the same margin as ORE, that's earnings of $10.5m when the expansion is completed, and $157m fully priced. Given that they don't fully own the 1500 tonnes, it isn't producing yet and their market cap is currently $293m, what have I missed here? Has anyone looked at them more? Are there further AGY expansion plans that I've missed?

Otherwise you'd be saying that a forward P/E of 28 is justified, assuming the expansion plans they're working on now were already operating. I would buy that for LPD between P1 and P2, and it would produce a price of $0.96, but I wouldn't be applying that same ratio once P2 is constructed.