02-08-2012, 09:57 PM
(02-08-2012, 09:16 PM)propertyinvestor Wrote: I will give you a buffet treat tml, make sure you buy up all the way to 1.50
Never under-estimate Mr Market's genuine intention and ability, especially in the case of a very high-quality stock and business like THG. By looking at today's closing 'sell' queue, there are only 64 lots queued all the way to $1.50 - i.e. it will take only a little over $90k of market capital for Mr Market to breach the $1.50 mark in one single stroke! Of course, one may argue that there will be new and more willing sellers emerging as the price goes up, but I really doubt there will be many THG shareholders who will sell and push the price right down again. The reason is quite simple - even at $1.50, most shareholders will likely still hold the view that THG remains under-priced vs. its fair intrinsic value, which, IMHO, is in excess of $1.80. My simple valuation basis: 6x of FY12's FCF, plus 31Mar12's net cash reserve and property reserve (adjusted to CMV), less FY12's $0.06/share Final dividend.
Now, please don't say I am trying to talk up THG's share price, as I am merely sharing my views in response to the above remark. As usual, I advise all investors to do their own research into a stock and do their own valuation.