Great question, obviously all my opinion, but I'll do my best to explain my thoughts.
First of all the easiest valuation method is simple fundamental value (PE/Book value etc), which TNK clearly are "undervalued" compared to their peers 7X earnings & 1.2 X book, however there seems to be this whole hate on P/E ratios lately, so I guess lets forget P/E or book value for a minute...
Currently averaging 20.9% return on equity over 5 years (incredibly impressive), revenue growth of of 73% over the same period, 21.8% cash on hand growth over the same period, and 23.4% book growth (same period)... Add in EPS, Op cash flow and free cash flow (same 5 year period)... Then add in smart acquisitions, creating a niche market with a solid brand, so even if we don't go down the path of forward earnings (which are set to increase considerably with new facilities coming onboard and launching) you are left with a very rare profitable company that the market seems to have forgotten, in my experience I've never seen a company like this stay forgotten for long (which is what we are starting to see now heading from $0.70 to $1.11).
I bought in at $0.79, at the time this was the only company listed on the ASX trading under 10x earnings with over 10% ROE, 10% ROC, 10% sales growth & 10% cash growth, my only concern was debt, as I dug deeper I noticed it was all spend on centers and acquisitions.
Don't get me wrong, I'm not calling $2 or $3 in fact I don't want this to run, I'm hoping to hold the company for at least 3-5 years.
TNK Price at posting:
$1.11 Sentiment: Hold Disclosure: Held
