Sabine
Thanks for the information. I suspected what you wrote, but I was surprised at the small size of individual trades. My style of investing is not to worry about the manipulation of the SP, but to focus on things like EPS, and to a degree on the PER, but only to the extent that a PER for any current SP suggests what the market expects the EPS should be in the out years.
On the matter of MND's PER relative to NWH, I was not too fussed about how one should derive a useful PER, because all I wanted to imply was that NWH's PER is likely to go up, so if the EPS goes up, and the PER goes up, we will get the benefit of both the multiplicand and the multiplier increasing to occasion us shareholders much joy.
I tend to value a share on a forward-looking EPS basis, so if I suggest a value of 22c x 14 = $3.08 in FY20, were 22c relates to a FY19 estimate, I am implying that the EPS should increase in the two or three years that follow, and the SP should hit $3.00 before the end of FY20. That is a personal valuation, and the SP may will take time to hit $3.00 (months, not days). The rounding to $3.00 recognises that this is a crude hunch with no pretensions. For the same reason, semantics, I avoid the term “intrinsic value”, because in my mind “intrinsic” conveys an impression of solidness, whereas the $3.00 is a gut-feel valuation, as is the nature of all PER-based valuations. Of course, I hope to see $3.00 well before 30 June 2020.
Pbawley
Like you, I rarely look at published PERs. I tend to apply my own PERs to forward estimates (your EP1) but I would use a higher PER if the forward trajectory of EP2 and EP3 look good. If the nature of the company is changing for the better (more diversity, less cyclicality, improving margins, less debt, an improved moat, etc), then I would increase the PER factor, because that gives me more long-term comfort. I actually think a PER of 14 is modest for NWH, but I have no need to risk venturing a higher PER – good enough is good enough.
On NWH, it seems that you and I sing from the same hymn book. My
37386181 post of 9/2/19 has the words
“. . . NWH's FY19's guesstimated EPS could reasonably have a per of 14 applied . . .”, and it moots a target price of $3.00 for FY2020, which implies an EPS of 22c for FY19. Announcements of significant contract wins scheduled to be awarded in June-July 2019 should see that target $3.00 reached this calendar year, but to give myself slack, I chose 30 June 2020 – more of that good-enough-is-good-enough attitude (for Sabines' benefit,
satis est does the trick in Latin
, a phrase popularised by Martin Luther, and bandied about by Lutheran divinity scholars)
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