Originally Posted by
Caesius
Youch, bought in last week as I keep thinking companies like this are a bit cheap at the moment, I need to learn from mistakes. Out of interest I did a really rough DCF analysis on WDT - from the figures I used, which are probably very wrong, it still comes out overvalued even at 11 cps (although whether DCF even applies to a company like WDT is another question).
What that outlined to me is how difficult to predict their cashflows are. I know they have a large tax offset, but maybe I'm crazy for thinking last year's positive cashflow was the first of many. From what I've heard they are a clever bunch technically, but so many companies seem to suffer from this issue of being technically good but poor finanically.
I will hold for now, but in hindsight, I think around 11cps is probably fair value.