Hi GS, I like to predict the share price in the future as share...

Hi GS,

I like to predict the share price in the future as share investing for me is setting price targets and buying on price weakness. My goal is to achieve at least 20% return p.a. That’s why I’ve been holding aef since 2008.

My prediction is purely for my purposes so I can see if I am likely to get this minimum 20% return.
As for the high PE, that can change rather quickly. We already have guidance for FY1 at or above $3M and that was released on dec 10, well after the start of the market correction. Second half results will be dependent on many factors (market performance, fees reductions which started in October, and spending on internet and staff). I think the market only has some mild upside in this half. Fee reductions are done. It’s only the spending that could drag profit growth down.

Despite these uncertainties, management is likely to spend with some caution so that FY2 profits are at least a bit more than FY1. I’m purely guessing that will be about $4 to 4.5M.
The average full year estimate is about $7.5M with eps of $6.70. That’s a future 1 year PE estimate of 25 on current prices.
My trading software says that the historical PE ratio has been generally high but increasing profits in the past 5-6 years has maintained this ratio as sp increases. Currently the PE is near 40 and usually trades closer to 30-35. I can see why you think it is a little over cooked, but only by 5-10%.
I will be purchasing some on price dips. Unfortunately I’m a little low on cash. The Christmas period has drained my cash pile. If anyone will give me free cash, that would be appreciated.

Cheers
CPD