Ann: FY12 Half Year Results Announcement , page-7

Okay, I've looked into the report and it reads well in my opinion. But what price should it be trading?

FSA shares: 136867219 million (as of 31/Dec)
Current price per share: 30 cents
Current market cap: 136 * 0.3 = $41 million
Half-year profit: $3.7 million
Full-year profit (assuming that they will meet that profit again, ie double half-year): $3.7m * 2 = $7.4 million

Current p/e: 41/7.4 = 5.5


Now, given a 'fair' historical p/e range is between 10 and 14, if it was to achieve these p/e ratios, then it would have a market cap between:

7.4 * 10 = 74 million to 7.4 * 14 = 103.6 million

Price per share (divided market cap by number of shares):
Low value: 74/136 = 54.4 cents
High value: 103/136 = 75.7 cents.

And this does not take into account that historically the second half has always been better for FSA. And also the NTA is an important consideration. Given FSA has assets (excluding intangabiles) of $53 million, then its current NTA is: 53/136 = $0.3897*.

*Why is this different to the report? Funny thing is that accountants like to do 'accounting' things, such as use weighted number of shares. Why? (Who really knows!!!) Anyway, a 'real' meaningful snap-shot is found only if you use the number of shares at the end of the report and not the weighted value!!!

So in my view, it should be trading about NTA + 1-2 years of earnings (depending on how confident you are about the future).

Good luck holders.

:-)