CLH 0.00% 22.0¢ collection house limited

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  1. 1,945 Posts.
    Thanks again for posting madtrader. As you say, a DCF is vary sensitive to the multitude of assumptions - maybe less so one on its own but as a whole they are. If you get a value range of 1-1.4 using a discount rate of 10-12% ish then that makes me pretty comfortable we are around the low point of fair value.
    I certainly agree that DCF valuation is the gold standard however I am sure that you don't need me to say that shares rarely trade according to them. By historical standards (which are based on CLH's performance) the current PE is extremely low.
    This is either because it is cheap or future performance is not going to be what it was. I personally think there is limited downside at the current price and I think the looking forward there is much to be optimistic about.
    That said if I didnt hold I wouldn't be rushing in. I reckon the price will crusie sideways for several months until the business provides an udpate.
    At that point I think the share price will move on a 'PE basis'. Any NPAT forecast that shows the company is trading at a low multiple will see the market move the SP I think.
    From that point the analysts will sharpen their pencil and re-do their DCFs. At which point price targets from go to woe will be updated.

    I'm curious - what stocks do you hold at the moment that you are also running DCFs on? Any that you see that you think are cheap?
    Cheers
 
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