Students of Roger Montgomery's (Buffett's) intrinsic valuation method
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Correct. All things being equal. Leverage increases ROE and makes a company more valuable.
But all things are rarely equal. Companies in different industries have different levels of debt that are deemed appropriate. Companies in the same industries have different operating efficiencies and margins so their ROE / ROC are different on those grounds.
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He has been spruiking CCV for a long time. I remember when it was about 58c he was very positive on it but I was already fully loaded up.
It is more tempting now given that there are not so many decent looking opportunities around.
On the program your money your call this week. Roger hinted that he was accumulating shares in a gold producer.
He didn't want to say what the company was as this may effect the price he is paying.
I remember that the same type of comment was made before he spoke at length about MCE
Anyone got an idea on what the gold stock maybe?
He didn't want to say what the company was as this may effect the price he is paying.
I remember that the same type of comment was made before he spoke at length about MCE
Anyone got an idea on what the gold stock maybe?
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haha, just wondering...did you sign up just to find this out?
I have a strong inclination that the company would be RMS. It ticks alot of the boxes from a Value Investing perspective...has a new mine opening soon...low cost producer...good ROE, virtually no debt...and its small cap...
Expect RMS to hit $2 when he mentions it...
he spruiks these stocks after he buys them...knowing the effect it will have..
He virtually has a license to print money...
No it's not RMS. I thought it would be too but Roger said it isn't. I've been looking at RMS for a bit now. I have an idea but I'm not at liberty to say until I buy some too!
Could it be MML? understand MML is a rather large company, but has a rediculous margin on its production (cost less than $200 per ounce while gold price is currently $1,480 per ounce).
Note MML is a favourite of mine which I think is undervalued and I currently hold. But it has zero debt, growth prospects and significant cash flows. Just my 2c.
Note MML is a favourite of mine which I think is undervalued and I currently hold. But it has zero debt, growth prospects and significant cash flows. Just my 2c.
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Yeah MML does look good for a gold stock. Another interesting one that appears very undervalued is GDO..
Im not too sure if my valuations are spot on for these companies but GDO definitely shows value...
Im not too sure if my valuations are spot on for these companies but GDO definitely shows value...
VS, just ran some quick numbers with a combination of consensus estimates, recent quarterly activities and quarterly costs.
Looks like they could be well on track for EPS of around the 8-9 cents mark and with minimal debt (EDIT: Looks like they do have some debt actually, explains why they didn't show in my personal screener, this could alter the valuation a bit, still looks promising though). This would value them at least in the $1.00+ mark by my simple calculations at the moment (still at work).
Could potentially be a good find
. Interested in the views of others and note I haven't looked at their history or potential in depth, just ran some quick numbers. Certainly on the very brief face of it though has some potential to have an intrinsic value well above today's prices.
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VS, just ran some quick numbers with a combination of consensus estimates, recent quarterly activities and quarterly costs.
Looks like they could be well on track for EPS of around the 8-9 cents mark and with minimal debt (EDIT: Looks like they do have some debt actually, explains why they didn't show in my personal screener, this could alter the valuation a bit, still looks promising though). This would value them at least in the $1.00+ mark by my simple calculations at the moment (still at work).
Could potentially be a good find
Im at work at the moment but ill get back to you this evening with a more detailed view of my thoughts...i too still have a lot more research to do so it will be good to work as a team
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Hmm, yes, GDO does look undervalued.
At the current forecast EPS, the ROE will be around 60%(ish) for the next year. I have a forecast IV of $2.20 for the next FY.
That's a massive discount to IV at the current price.
For the current year, the IV is about $0.14 (ROE was 17% and I have a RR of 15%).
Of course, all of this is based on the FORECAST EPS of 8.9c from commsec with its consensus of one analyst (hardly a "consensus"). Therefore, I take the above future IV with a huge grain of salt. Thoughts on the future NPAT anyone?
At the current forecast EPS, the ROE will be around 60%(ish) for the next year. I have a forecast IV of $2.20 for the next FY.
That's a massive discount to IV at the current price.
For the current year, the IV is about $0.14 (ROE was 17% and I have a RR of 15%).
Of course, all of this is based on the FORECAST EPS of 8.9c from commsec with its consensus of one analyst (hardly a "consensus"). Therefore, I take the above future IV with a huge grain of salt. Thoughts on the future NPAT anyone?
Just a suggestion.
It would probably be better if you take discussions & valuations of particular stocks to the relevant stock thread as you may get more feedback from followers of that stock who don't follow this thread and also this thread won't get cluttered and important info missed on both new value stocks posted here and info on the stocks you are all researching.
Thanks
It would probably be better if you take discussions & valuations of particular stocks to the relevant stock thread as you may get more feedback from followers of that stock who don't follow this thread and also this thread won't get cluttered and important info missed on both new value stocks posted here and info on the stocks you are all researching.
Thanks
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I get what you get. For some reason I just dont feel secure with the resource sector.
nomore4's, we are a little off track however the stocks were looking at are in relation to Roger Montgomery's style and valuation method.
drlog, agree with you a little as a lot of what i've been reading lately is pointing towards a China slowdown either way. It could be a gradual slowdown starting now with mild pain, or it could be a real shock to the system in possibly 2-4 years time.
This would really hurt our resource sector, even if India does pick up some of the slack. However that may mean that gold retains its time in the spotlight and remains at record levels, so value companies like GDO or MML could still be making these exceptional margins.
Any idea when we will find out what Roger's gold pick is?
drlog, agree with you a little as a lot of what i've been reading lately is pointing towards a China slowdown either way. It could be a gradual slowdown starting now with mild pain, or it could be a real shock to the system in possibly 2-4 years time.
This would really hurt our resource sector, even if India does pick up some of the slack. However that may mean that gold retains its time in the spotlight and remains at record levels, so value companies like GDO or MML could still be making these exceptional margins.
Any idea when we will find out what Roger's gold pick is?
Hi all
In regards to companies and value, E trade have a stock valuation tool GDO indicates last price 0.50 stock value is $1.12.
Anyone have an opinion of how accurate this is with this tool. Does it seem accurate based on your own way of evaluation of a company
last price...0.50
book value per share $0.11
discount rate 10.75%
dividend $0
first year forecast EPS 0.089
second year forecast EPS 0.086
long term EPS growth 30%
long term industry average return on equity 10.1%
Stock Valuation 1.124
Cheers
SG
In regards to companies and value, E trade have a stock valuation tool GDO indicates last price 0.50 stock value is $1.12.
Anyone have an opinion of how accurate this is with this tool. Does it seem accurate based on your own way of evaluation of a company
last price...0.50
book value per share $0.11
discount rate 10.75%
dividend $0
first year forecast EPS 0.089
second year forecast EPS 0.086
long term EPS growth 30%
long term industry average return on equity 10.1%
Stock Valuation 1.124
Cheers
SG
I've got a suspicion the gold stock is CAH. Have heard several sources say it's undervalued but yet to value it myself. It's a cheap producer, about to start producing significantly more and lots of room to increase reserves. The Speculator and Fat Prophets like it and are buying. Any thoughts?
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Hey Zac,
There isn't a course, I'm pretty sure it relates to generally when people have read the book/contributed to the blog.
There isn't a course, I'm pretty sure it relates to generally when people have read the book/contributed to the blog.
