Sweet dreams, page-10

Thanks for thorough response PP....makes perfect sense. I know the following repeats much of what you have posted previously...based on Thomson's forecast of 23.4 and 27. 4 c eps for the next 2 years, the price matrix is as follows

eps PE 10 11 12 13 14 15
22.8 2.28 2.51 2.73 2.96 3.19 3.42 2015
23.4 2.34 2.57 2.81 3.04 3.28 3.51 2016 Use this as the current valuation
27.4 2.74 3.01 3.29 3.56 3.83 4.11 2017 Forecast (in 12 months)

I would of thought, given underlying eps for FY 15 was 22.8c (from memory), as a rough price guide you could use 2016 earning for current valuation. Current consensus of 6 analysts, has a mean price of $2.88, a pe of 12.6 which seems (as you have commented before) reasonable. I subscribe to Stocks In Value, it has a very low current valuation of 2.37 and consesus of $2.35 which seem strange as they use Thomsons data. I now note they have just quarantined the stock, I rang them to query the numbers. Hopefully they will update correct nos. Will let you know

A PE of 13 and price of $2.96 seems fair and conservative. We know TGA's PE swings from a low of to a high of about 15. Having sold out in the high 2.90s and bought back in around 2.57, I am hoping those sweet dreams of a > $3.00. The hard part is deciding whether to sell when / if targets are met.

As an aside, I have been looking at the charts/technicals not that I am that confident in either my analysis or their use. However for fun, TGA has been in a solid uptrend since 2009. The current sp sits right on the bottom of the channel (hopefully the low before resuming an uptrend to the top of the channel. Also (and and am no expert) there appears to be a bit of Fibonnaci stuff happening. There appears to wave equality of approx $1.80 for the first large wave up (Wave 1) to the approx $2.20 high in 2011 and the third large wave to last year's highs around the $3.15 mark (wave 3). The recent lows (wave 4) equates to an 38.2 % Fib retracement ABC correction wiht Wave A and C equality,

If I am correct (and hey I ain't a fibbonaci expert at all) and depending on whether Fibbonoci is a crock of chicken entrails, this has been a 4th wave correction then and according to Fib analysis (or my interpertation of it), then a final 5th wave up of equality (to upward waves 1 and 2) would present a rough price target of $2.48 (or thereabouts) plus $1.80 equals $4.28 which perhaps represnets 2017 earning x 15 and a bit. If wave 5 is truncated then targets are:

100% (wave equalit) $4.28
61% (fib ratio) $3.58
50% " $3.18


I wrote the Fib analysis for a bit of fun, but these price targets seem to fit in quite well with the fundamental anlaysis.

Thanks PP