Futurist I agree with you valuing a near monopoly company is very hard
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Futurist I agree with you valuing a near monopoly company is very hard
With all the various tirades over the last week did we decide what the real value, if there is such a thing, of PGW was
Yahoo has targets from 36 cents to 49 cents. I got a few mates to do their intrinsic value calcs and they ranged from 29 cents to 62 cents - discarded the outlier of zilch.
Can't remember what sparks intrinsic value is, my back of envelope iPad calculator app value is 37 ( please don't chastise me). Won't mention snoopy's view
So it seems nobody can agree - anything from around 30 to 60 and mr market says high 30's.
We all can't be right can we -wonder how it will all turn out?
Looks like I have to add belgies 60 to my note
On the yahoo chart I look at the red line (100) is above and has been following the green line (200) fr some months but not crossing
The purple line (20) has stopped falling and maybe heading up but not crossed any long term line yet
Another source has 5ma at 35.6 and 20ma at 38.2 - current price at 37 signals weakness? Or just signs that it all honky dory from here
Well A quick look at the chart and I see a sick looking puppy,nothing looks very good,in fact 50 day MA and 150 day MA are about to cross on the way down,yuk. Wait for the price to settle somewhere.
One would have to say PGW is a pariah if the market - all based on past performance and investor disappointment. Once given that tag a company never really achieves full respect, no matter what it does to change and do things differently. Generally the shareprice will always be a laggard and not very often do they trade anywhere near 'intrinsic' value, whatever methodology is used to calculate that, no matter how good John and George are.
Research shows that it generally is only a few shareholders (major ones) that move a shareprice - one way or the other. Small investors don't move shareprices. PGW might have a few larger shareholders like ACC and a couple of other instos but I feel they are not really that keen on holding them but only do for portfolio reasons. With a shareholder with 50% plus what can the other larger shareholders have in 'moving' the PGW shareprice, little I would say.
So I combination of being a market pariah and having a majority shareholder is not a gd combination if one expects a shareprice of 60 cents plus
Unless Forbar can continue to produce positive reports to tout a bit of business or unless a white knight comes and puts them out of their misery.
Maybe. Just maybe, that might happen. The takeover bit nt the Forbar bit
But ten what the heck do I know
The annoying thing is we wont get any updates on financials until early august. doesn't really seem worth the wait considering the potential gain compared with other stocks.
What really does drive a share price is earnings and expectations of future earnings.
To get earnings you need to put in the right people,and earnings will come.May not be straight away,but earnings will come.
PGW have the right people in Chairman Sir John Anderson and CEO George Gould.
The company is on tract to deliver.In fact one could say they are "well positioned."
ps.Drought.Sorry, but I wish it would stop rainning.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Fundamentally you are correct Percy .....except those things drive what punters expect to be a fair share price - intrinsic value or whatever you want to call it
However the other important factor is sentiment. Some companies have negative sentiment and sometimes it never goes away. I used the term market pariah, I believe PGW to be one of those. At least snap it's agrees with me there.
The other point is you need punters to drive the share price up ....and research shows that only a big players actually 'move' the share price, ie buy heaps of them. Do the big players have the wherewithall to do this PGW with a majority shareholder and all that negative sentiment.
That was the point I was making .....PGW might do as you say ...but would that performance ever be reflected in a fully 'valued' shareprice? One may need to apply a discount to any value calculation to reflect this.
There has been a couple of good papers in the Journal of Portfolio Management on such a topic
But heck what do I know anyway
Yes plenty of rain the last few days .....bloody boring eh when you wanted to do outside things today
There are exceptions to every rule.In NZ the pariahs were Smiths City which went into receivership.Put the right people together,Paul Preston the Receiver,,Bill Revell the Chairman,and Craig Boyve the CEO,and they traded out of receivership,and in the end relisted on NZX.
The other pariah was offcourse RBD,which kept underperforming for years.New CEO every year or two until they gave the job to the South African guy.Since then it has performed well.
PGW is now a well run,well focused company,with a bright future.
"The Smart Money" are well aware of this.!!!!