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FGE - Forge Group

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Reported a 89% jump in profit today and a final dividend of 5 cents up from 3 cents last year

Maybe see another push higher as its been trading around $3 for awhile know, closed at $3-25 so maybe will get up to the independent valuation area around $4 in the near future.
 
Another super stars on the rise
these boys put their big brother to shame
in earning power and capital allocation
 
I have just read Value Able by Roger Montgomery and have come up with a conservative intrinsic value of $4.54 for this stock. I am very happy this is my largest holding - wish I could find more companies with a satasfactory ROE with the ability to retain a large share of earnings.
Just like a compounding machine!!!!!
 

I just read his book as well and found it really useful. I too have valued FGE but am unsure if I have calculated IV correctly as I have been practicing using annual reports not interim. Instead of using statistics from annual reports do I just use the ones from interim? Also do you mind sharing what RR you used?

Thanks,

Adam
 
dont forget the margin of safety from Uncle Ben Graham

Want to see another sleeper super star in a few years like NVT,FGE ..mark my word...check out CC something it's not CCP a bit of digging you should find it...

to make the most money you need to find these sleeper super stars when no one notice.

but it boast the cash flow, the dividend and the balance sheet most
of their big brother cant seem to manage properly..
 


I will take a guess and another stock i already hold........................

CCV ?
 
G ' day Adam
I agree Roger's book is really handy.
I went ultra conservative when working out the IV for FGE
RR = 10%
ROE 2011 = 20% (i know this is conservative but not sure if the can keep up stella results when looking for bolt on aquisitions)
Pay out ratio 20% (I know this is much higher than historical but I figure this adds to my margin of safety.
2011 Equity per share $1.425
Using the tables in Value Able this gives me a IV of $4.54 end of FY 2010 / 2011.
However in a recent post by Roger he seems to have a value of $4.62 and it reads like this maybe current.
Anyway I have filled up my portfolio with this stock and will not be selling in a hurry.
 


Good to see some others here using Roger's valuations. I've got it at $4.08 rising to $4.86 in FY10/11. I'm using 12% RR and 25% ROE. Due to the amount of competition in this area i dont believe a 10% RR is able to be used.

Just wondering where you found the forecast EQPS for 2011 as it's not listed on my brokers site? Do you have 2012 also?
 
there is a lot of tipsters very keen on this company and with good reason
went to the traders expo last month and it was a top 10 stock with 3 different groups including Roger
 

When I first got into this company about 6 months ago a broker from WA started ringing every couple of months and sending me valuations.
They have 2011 equity @ $115 800 000 and 2012 @ $133 800 000
To get $1.425 EQS I simply worked on $114 000 000 equity and 80 000 000 shares.
 

Just be very careful with estimation of value, it is fraught with danger and the graveyards of investing are littered with the headstones of funnymentalists given the wrong information, remember HIH.

Getting back to the situation as it is now, on a technical basis I note FGE is in a nice uptrend. Follow the trend.

However the recent expo or whatever it was has induced some to invest and more able operators have sold in to this.

Look at the chart at $1.50. It tries to break through, cannot, and then it acts as support as it goes on up.

Same at $2.

Now its gone through $3 and I'd suspect it will retrace as the sellers have gone, and the buyers have all been to the expo.

So it may be wise to wait until it comes back to $3.

It should keep on going up though, its a very healthy trend atm.
 

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I don't know anything about Technical ananalys but have to agree that caution should be used when valueing companies.
Look at FGE ;
Heaps of cash to be spent on, bolt on aquisitions (these could be good, bad or indifferent), increased dividends or organic growth
A predicted boom in the resource sector, this should fill up order books but who the hell knows for sure.
Capital raisings for takeovers.
There must be more varieables I havent thought of but the bottom line is you can look at Equity Per Share and ROE growth into the future but it is just a prediction and you had better find a nice margin of safety.
 
Thought I'd throw my 2cents in here.

Another one using Roger's valuation methodology.

I used an ROE of 30%, as from looking around the large construction/engineering companies seem to be getting around 30%. Working in the industry it's typical to throw on 20% on job estimates, so I don't think 30% is unreasonable for more sophisticated companies. I used 14% IRR as I believe this accommodates an adequate risk premium in regards to the company looking for acquisition (they did acquire webb in 2007 and seemed to have done quite well with that), as well as any exchange rate fluctuations. Plus, I just feel a rapidly growing company like this demands a high risk premium, especially when they are benefiting substantially from economies of scale. Payout ratios I used as calculated, increasing to around 15% in 2010/2011.

I came to $4.47 for a current valuation and $4.66 for 2011. Which seems very conservative to me. I am considering lowering my IRR to 13% for 2011 which equates to $5.30~ depending on future information. Either way, I purchased at substantial deductions to my IV estimates.

Happy so far.
 
Can't argue with your logic AIDO, I used a lower RR but also a lower ROE to come up with a value pretty close to yours. I think the main thing is to be conservative, wait for opportunity to buy, or in my case watch for sp to increase to intrinsic value and then think about re-evaluating the company for future rises in IV.
 
Another good day for FGE SP up 4%, I wonder if it is broker driven, new contracts on the way or just SP catching up to intrinsic value?
 
The good news just keeps coming and the SP hit $4-74 today, up about 130% for the year so far, on top of 2009,s triple didgit gains


Heres todays announcement



The Board wishes to advise that the Company forecasts net profit before tax for the half year ending 31st
December 2010 to be in the range of $25m - $27m. This represents an improvement on the previous
corresponding period (pcp $19.04m) of up to 42%.
 

Yes more good news, great company progress..
In my opinion , they have made one mistake, (as did I)
and that was the deal with Clough, (and i chose CLO instead of FGE)

I'm interested in new projects over the next 6 months.
 
These quality small caps put their big brother to shame

Double bonus today, CCP came out with another profit upgrade and
stick to its gun about double dividend payout this year.

next TGA and CCV will come out with their hahahah
 
ROE said:
These quality small caps put their big brother to shame

Double bonus today, CCP came out with another profit upgrade and
stick to its gun about double dividend payout this year.

next TGA and CCV will come out with their hahahah
Click to expand...

That is a good list of companies ROE. I hold FGE and have CCP, TGA and CCV on my watchlist, good luck to you.
 
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