external headwinds mask a great growth story, page-6

MJS:

Thanks for you contribution. I was lucky enough to pick up a significant amount of stock at around 10c and 11c level after the trading date at the end of July last year.

(To be honest, I only began posting at around the 15c level once I had the bulk of my position set, but I guess that is the poster's prerogative!)

However, I then continued to buy more stock between 15c and up to 18c in the subsequent weeks.

Just for recalibration of the valaution given the stock price's performance over the past 6 months:

At the current share price, and assuming the Brazilian business heamorrhaging is stemmed, the stock is trading on FY13 P/E of 7.1x and EV/EBITDA of 4.2x which, even for an illiquid, microcap company, is undemanding, I think.

Especially given that I am a believer in the scalability of the business and long-term growth prospects of this company.

As I have alluded to before, we don't need an outright reversal of the A$ and the silver price to restore profit growth...they just need to stabilise, even at current lofty levels, and the pricing power of the company will become manifest in strong (>20%pa) organic earnings growth.

As for other micro caps I'm looking at: I haven't been overly active in looking under rocks for the past 6 months or so (I'm a bit tired and lazy these days) but I'll be sure to share my findings at an appropriate time.


Uncle Panda:

How did I calculate CAGR of 7.6%pa?

I'm afraid I don't understand the question very well, but I'll try to answer it as best I can.

I'm assuming you know the arithemtic for doing so..its simply:

CAGR (in % terms) = ((F/S)^(1/n))-1, where:

F = Final Revenue
S = Starting Revenue
n = number of years under review.

If your question relates more to how I did it in US$ terms, given the company reports its financials in A$ terms, well I simply took the A$ revenues of each year and converted them to US$ equivalent values using the prevailing average A$:US$ exchange rate at the time, and then worked out the CAGR of the US$ numbers using the above formula.