Shabby work on RBS Morgan's behalf. As if by adding two scenarios together and then dividing by two they somehow figure they'll arrive at a more accurate conclusion. Is it that they don't have any confidence in their DCF valuation or do they not have confidence in their EV/EBITDA valuation? Or both?
I stated earlier that I calculated fair value at 89c per share which interestingly is just 1c of RBS' valuation. Included in this valuation are 3 beliefs not to be found in the accounts, these are that potential for growth over the next few years and possibly beyond is incredibly strong, potential for added earnings from marketing DSA's service Australia wide and the cross selling benefits from this vertical integration is exciting for the combined companies and that any earnings retained by RQL (currently at 100%) will be put to very good use by Jamie Cullen who I rate very highly. Added to this are the quality of the earnings which come mainly from recurring revenues (currently at 70%.)
So whilst at first glance RQL may not be selling at bargain prices I believe that come their end of year results the current share price will be looked upon as a bargain. My thoughts only and I have been wrong many times in the past.
Best Wishes to all.
RQL Price at posting:
66.5¢ Sentiment: Buy Disclosure: Held
