If you don’t mind me asking, what did you think of the recent...

If you don’t mind me asking, what did you think of the recent InvestSMART article. Any holes in their thinking?
I feel like azj are in a bind. Who know what the coal industry will be like in 20 years, so it seems to me that qca is apportioning low risk to an industry that does have some risk. The regulation crimps the returns they can get, despite being having an asset that no one will compete with.

InvestSMART Summary:
We don’t know if the decision will be amended or overturned by the courts. Whatever the case, it's clear that a favourable regulatory period will soon be replaced by a less generous one, and shareholder returns will almost certainly be lower.

As things stand, Aurizon has a book value of $2.41 per share and the draft decision only allows for that equity to earn a return of 6.99%. If you require an 8% return on your investment, you’ll need to buy the stock at a discount to book value – something in the order of 25% if we assume the company retains a third of earnings to grow the network, which is the five-year average. Even generous assumptions for QCA’s final decision and higher retained earnings would only warrant a 30-50% premium to book value.

The current share price of $4.36 is an 80% premium to book value. That being the case, we’re unlikely to consider upgrading Aurizon until the stock is trading well below where it is today.