Originally Posted by
MAC
The Clare Capital valuation range of $5.60 through $30.91 is extraordinary. The scenario 3 valuation of $17.16 based on a 1.06M customer outturn would propose that XRO is presently fully valued.
I do hope for holders that XRO ultimately reaches 3M customers and $30.91 under that scenario, but with the present SP at circa $19, there seems a lot more risk than balanced upside reward would offer and if the market, at any point, decides that customer growth may plateau low, or not grow to multimillion levels, it may suddenly be a long way down, potentially to $5.60.
Still, if you are a trader rather than an investor this is the stock for you, have a planned exit and hold until the technical's fire sell, ....., imagine all that tax on XRO profits.
I don't see a place for XRO in my investment portfolio, I've decided that I do equate uncertainty in forecasting with risk, and there are better risk/reward propositions in the NZX that fit my tolerance better.
That's not to say that XRO won't become the apple of NZ, we just can't predict with any confidence.
Disc: Don't Hold