WHC isn't a supermarket, the accepted metholodology for valuing...

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saracenm

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14/08/24

17:04

Post #: 75207129
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Originally posted by Alex.shipway: ↑

Whilst I'll use an abundance of sources to try and work out a good valuation for a company, the 'fair value' from simply wall street is rarely ever a good go to for valuation. I'm not sure if this is industry specific (i.e simply wall street valuation methods cant seem to get a good valuation for mining companies).
I'm not sure what algorithm they've used to get a $20+ share price valuation, but even hardcore WHC fans would admit this valuation is very stretched.

Another stretched valuation, for example, is RMD - which their fair value is $52. A whole 50%+ higher than where it currently is.

Having high ROE is certainly a good metric to use, but also remember that ROE can be manipulated. One can reduce the 'E' to make the return appear higher.

WHC ROE has been a bit choppy and all over the place for the last 10 years. I'd say it has only ever been fantastic in the last 2 years. Can it keep those numbers going? Maybe? We'll get a bit of an idea in a week or so.

Again, this just shows the cyclical nature of investing in a company of WHC and the importance of trying to pick the 'lows'.

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WHC isn't a supermarket, the accepted metholodology for valuing resource companies with lumpy cashflows is NPV.

Using historicals as a prediector of history for resource companies is another metrics trap.

Whitehaven is a very different company to what it was a year ago, let a alone a decade ago. The outlook for coal is very differenet as well.

WHC Price at posting: $7.71 Sentiment: Hold Disclosure: Held
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Last $5.57		Change 0.000(0.00%)		Mkt cap ! $4.659B

Open	High	Low	Value	Volume
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5.230	2416	3
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WHC isn't a supermarket, the accepted metholodology for valuing...

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