This is a good attempt to kick off some meaningful discussion on market expectations ahead of reporting. It is a gross oversimplification to believe, as your textbook on valuations suggest, that EMH always holds - and that the current share price accurately reflects all information and future expectations. I don't know you can also assume that all shareholders have the same expectation. Many significant shareholders are expecting this to be a double or triple bagger over a year or so, for example. Morgans reiterated their target of $6.40 after the downgrades this year. To be honest, my take is that the current price is a reflection of a lack of confidence and sentiment of distrust among some market participants. Those views are encouraged by adverse media reporting (AFP raids, etc), but take little account of the NPV and fundamentals. The whole premise of value investing is that current prices are not reflective of fundamentals, etc - that concept will be in your textbook also. Numerous examples of value investing abode on the ASX. I don't have the numbers before me, but my recollection is that even meeting guidance at the lower end will send this flying as confidence is restored. Announcements of new leadership appointments send it further, again, solely because of the confidence factor - not dollars and cents. All the best everyone.
NXL Price at posting:
$2.55 Sentiment: Buy Disclosure: Held
(20min delay)