Now that the dust has settled somewhat on WDS, it's probably time to act like an analyst (rather than a trader) and do a 'back of the envelope' fair value calculation.
The company has stated that NPAT for the 09/10 year will be approx. $7m. Assuming a P/E ration of 12, this values the company at $84m. With 143 million shares on issue, that's a fair value price of 58 cents. However, based on the pipeline of work, it's probably fair to say that this year's NPAT is a one-off hit and that the future year's NPAT will be higher. Assuming that a NPAT figure of $15m is achievable in 2010/11, and assuming a constant PE of 12 gets you a share price (assuming no dilution) of $1.25.
I'll encourage all the HC readers to look at the chart for TSE (Transfield) - they came out with a similar announcement in Dec 2008, fell from above $4 to below $1 and are now above $4.
God love markets and the opportunities they produce !!
where's fair value ?
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Last
$24.02 |
Change
-0.980(3.92%) |
Mkt cap ! $45.60B | |||
| Open | High | Low | Value | Volume |
| $25.01 | $25.01 | $24.02 | $199.2M | 8.143M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 5 | 3390 | $24.02 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $24.03 | 400 | 1 |
View Market Depth
| Last trade - 16.10pm 06/09/2024 (20 minute delay) ? |
| WDS (ASX) Chart |