Neptune Orient Lines (NOL)

[shanrui_91]

A valid point, Shanrui! If we are able to assume business cycles are fairly similar and that NOL reacts to them in a similar fashion, in terms of their capital allocation and operations, then yes we can use an average PER based on a full business cycle.

Even then, there is the wildcard of fund raising through rights issues (or the recently scrapped idea of issuing perpetuals) which may complicate the analysis. Not to mention that NOL also pays dividends in "good years", instead of retaining more of the cash for tiding over the bad years. How do you put a value to that kind of Management decision?!?

And finally, how large is the "hefty discount" going to be? I'd say 80%.

you are right, 80% will be a good figure. Another point is that when you are finally able to catch it at 80% discount, you might find that there's some excellent business out there trading at 50% discount and giving out high dividend yield.