Or it could get pulled down with end of year tax selling although i suspect that happened the other day,flip a coin.
Printable View
https://www.youtube.com/watch?v=NT2fvwZ4QgQ
Good analysis but his basis of valuation is totally dependent on analysts consensus which as we know change very easily . Recently they all got downgraded pretty heavily ...can happen other way also . But he wants to value FPH 37 times future earnings for safety ...as thats mean PE historically ...though it rises on better future prospects if on horizon ...eg Delta or similar variants coming back . He pays attention to future expansion of infrastructure plans of $ 700 mil but not includes this in future growth prospects after 2024 ...its after 2024 when FPH will come to limelight ...market will start getting warmed up by mid 2023 or even earlier
PE's got stretched right out in 2019 off the back on 10 year Govt stock at under 1% and will come under further pressure as this normalizes to about 4%.
Good analysis from a bright young man but his value needs to reflect the effects on multiples we are starting to see from much higher risk free rates.
Fair PE is low 30's in my opinion, 32 x 70 cents gives about $22.40 two years from now and discount that back at 10% per annum suggests fair value today of about $18.50 but as noted before these things often overcorrect to the downside so ~ $15 is not completely out of the question.
As Mr B seeks value and he is a good spotter of value ...as per him value in FPH will come below $ 20 ...
Keeping in view other factors which make FPH blue chip ...I will think its a reasonable buy around $ 22 . Also in my humble opinion its a golden opportunity these days to get FPH at such prices which are so close to value propositions ...normally its way over valued most of the time ...almost out of reach of retail investors
And considering the status of FPH on NZX and on index ...its not likely it will overcorrect too much ...after all all kiwisaver funds in ETF will go 14% in FPH by default irrespective its expensive or cheap
Value is in the eye of the beholder.
Some investors will never own shares in this company regardless how good the financial metrics look over the long term.
Why some feel compelled to comment on SP fluctuations is beyond me.
PS In hind sight it was a smart decision to sell WHS at $7.50 after owning it from the float