phil, thanks for the valuation calculator. I wish it were all that easy. I for one go straight to the assumptions:
Discount rate is pretty low for my taste. The calculation of that should take into account the stock beta as well as a significant risk premium. I would plug in at least 10c.
The EPS forecasts are pretty unlikely I would guess, especially with the AUD where it is versus USD costs. Let's half them.
EPS growth rate same = 1/2 since in this climate with commodities where they are I don't think we can see the same growth.
Avg ROE - well, half is enough said and probably generous.
The result is about 15-16 cents. And to be truthful right now that is probably not far off the mark. But as Paul said earlier it is completely dependent on copper prices. Simple really, revenue - expenses = profit (yeah there is lots of other accounting type stuff I know) and so if your expense rise or stay the same but your revenue (the price you sell for) goes down then whamO. The good thing about gold copper mines that I like is that when industry slows copper tanks, when industry slows anxiety and thus gold rises so there is a bit of a natural hedge. However, if this market dislocation had occurred two years from now they would be sitting pretty. Now I am not so sure. Obviously form your own opinion. Mine is that they ar a good bunch caught in a bit of bad timing. Worth a small bet for a bit.
PNA Price at posting:
10.9¢ Sentiment: ST Buy Disclosure: Held
