"Take a Closer Look", page-1187

First 1187 Last

Share
Profile

Follow
minkki

436 Posts.

17

20/07/17

15:40

Post #: 25986210
Share

Originally posted by suckii ↑

Rule of Thumb and How It Works

Firstly, I would like to thank Torpy for his excellent post on valuing companies, these valuations are normal procedures in evaluating companies for analysts and valuers. It's posts like these that shed some light to the mum and dad investors that have no understanding of valuation or even corporate business. And for people to criticise the market valuation when they themselves don't understand how it is done is only human nature.

I am not always right but I had to try and show the mum and dad investors a better understanding of the market and how I believe it works. This rule is used by professional market valuers on certain valuations, ADMEDUS would be one as this is not pointed out to the mum and dad investors. How on earth can they make a good investment decision, hence the professional calculates the IP's, patents, contracts and so on?

A professional uses the rule of thumb to find common ground when it's virtually impossible to go off the numbers. ADMEDUS is at it's low for FY17 at about 60M market cap, at it's high the market cap was over 100M.

Low - 60M

ADMEDUS'S Valuation - 84M

High - 110M

In the last 12 months, the valuation stacks up even if there was a 25-30% move up or down still makes the 6x rule stack up, eg:

x3 = 42
x4 = 56
x5 = 70

x 6= 84 middle ground

So looking at the numbers it shows that 84M is the common ground and the 3, 4 and 5 x revenue does not stack up, or 7x for that matter, 7x14 = 98M.

So ADMEDUS'S valuation for FY18 should look something like this:

Low - 100M

ADMEDUS'S Valuation - 150M

High - 360M

As soon as the numbers come out for FY17 the market will 100% correct itself.

PS: I believe this to be new knowledge for most mum and dad investors and if used on small caps would give them a better investment strategy.

Expand

Thanks for this, I think it could be a great "rule of thumb" technique for me with small caps, can you tell where does "14" figure comes from, probably screamingly obvious to all but me so patience appreciated. Thank you

AHZ Price at posting: 28.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

SI6

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

LRD

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Bitcoin jumps 8% to beat record on Trump vote optimism

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

There are more pages in this discussion • 41 more messages in this thread...

First 1187 Last

Add AVR (ASX) to my watchlist

(20min delay)
Last $10.40		Change 0.200(1.96%)		Mkt cap ! $219.8M

Open	High	Low	Value	Volume
$10.20	$11.34	$10.16	$356.8K	33.60K

Buyers (Bids)

No.	Vol.	Price($)
2	269	$10.40

Sellers (Offers)

Price($)	Vol.	No.
$10.60	4760	1

View Market Depth

No.	Vol.	Price($)
2	269	10.400
1	2000	10.350
1	812	10.310
4	1492	10.200
1	1000	10.000

Price($)	Vol.	No.
10.600	4760	1
11.340	250	1
11.500	125	1
12.000	5000	1
12.020	1000	1

Last trade - 16.10pm 06/11/2024 (20 minute delay)

AVR (ASX) Chart

"Take a Closer Look", page-1187

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Bitcoin jumps 8% to beat record on Trump vote optimism

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

"Take a Closer Look", page-1187

Top Stories

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Bitcoin jumps 8% to beat record on Trump vote optimism

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News