keygeo I like your healthy scepticism and conviction in your...

keygeo I like your healthy scepticism and conviction in your views. In the interests of transparency I have included below my high level dcf model that I have provided in the past, updated for new information. I updated it also for a couple of pieces of information I have learned from others in this forum who I felt had valid points and provided better assumptions than what I had previously built in.

The valuation range I prefer is $1.10-1.40 (not $1-1.40). Given the variability in assumptions I think it would be inappropriate to have a narrower point estimate. Also the value could extend north (or south) of that but have limited my range based on what I think the highest probabilities are. For interests sake if I increase the discount rate to 12.5% then for example I get to $1.05/share. If I decrease it to 10% I get to around $1.70/share. The challenge with a dcf is also the terminal value - I have increased this since my last valuation and is one of the larger causes of value change from what I had previously. The investment returns I have used are more favourable than what I have calculated from past data or that I can reconcile to past data. Out of interest the investment returns I have used are much closer to what the company is implying via their amortization rate. Also growth factors in the cash inflow side I have been, at least I think, reasonably generous. Consequently I prefer to use a discount rate that still includes a bit more risk assumed than say a 10% or less discount rate (which I might use given the current environment if I hadn't been what I think is generous in other assumptions). As mentioned before there is obviously a lot of estimation uncertainty and more detail doesn't necessarily mean more accurate. As outlined last time I posted this information I am sure we can all point holes in the individual components however overall I feel it is representative, provided a close enough estimate to actual cash flows over the last year for me to have some comfort it isn't way off for my own purposes and highlighted to me where they have made some improvements in the underlying business. As such I find it a useful tool among some other analysis I have outlined before for guiding my views around value.

On the note of why I "would appear to be a wasting your time analyzing it" (sic) I simply find it interesting and can assure you I have no financial interest in CLH. I have posted more on why I am following longer term in past posts, feel free to go back and have a look at those. You can choose not to believe that if you like, up to you I suppose.

Healthy debate on the topic is useful as it allows us to calibrate and consequently I appreciate your, and everyone else's views, regardless of whether they mirror my own. In fact I learn more from those who don't agree with me than those who do. This may be of some interest, even if it is to provide others with reasons why they disagree with what I have presented and more conviction in their views. Note that the below is a summary extract and the calculations link to the various assumptions, including the PDL cash flows that work from the investment returns discussed previously and is how I link those to my valuation.

Posting the image of my valuation summary separately due to size.

Please DYOR and don't take mine without questioning it.