I have no argument hat CCP is a far more efficient operator in collecting debt over a given period, however the relative value of each stock still has to be considered, and from the table below CLH comes up as being far better value imo....
I have made the assumption that each stock will return to its average pe (in this case averaged over 10 years), and in each case calculated the percentage increase required for each to reach this hyperthetical av. pe ......... also stocks will trade at higher pe's durng periods of lower interest rates so I have added a % increase to the av. pe for this.......
valuations for CCP are + 29% on current price, and for CLH + 72% on current price .......
also CCP's price/ book is 3 times greater than that of CLH - don't know why, but on that comparison CLH is 3.6 times cheaper.....
the present outlook for each company and the markets in general will of course will impact the market price significantly, so below is more of a starting point......
|
Column 1 |
Column 2 |
Column 3 |
| 1 |
stock
|
CCP
|
CLH
|
| 2 |
av. PE over 10 yrs.
|
14.42
|
10.84
|
| 3 |
Increase PE by 15% to allow for current world wide record low int. rates
|
16.6
|
12.47
|
| 4 |
Current f’cast PE
|
12.83
|
7.23
|
| 5 |
% increase to av. Pe. + 15% =
|
+ 29%
|
+ 72%
|
| 6 |
|
|
|
| 7 |
Current market price
|
$12.43
|
$1.115
|
| 8 |
X 1.29% increase to av. pe
|
$16.03
|
$1.98
|
| 9 |
.
|
|
|
| 10 |
Current book/ shr.
|
3.13
|
0.86
|
| 11 |
Av. Book/ shr.over 10 yrs.
|
2.31
|
0.99
|
| 12 |
Current market price
|
12.43
|
1.115
|
| 13 |
% increase
|
0.65 times
|
1.28 times
|
| 14 |
Fair value based on book/ shr
|
$8.79
|
$1.28
|
| 15 |
|
|
|
