Forum Archive Index - July 2000

["G Christie" <bayvu@ihug.co.nz>]

I share your concerns about the possibility that the Warehouse is
overvalued. NBR has run a further article on the fact that a loss  has been
reported as an asset. The effect of this was to apparently lift  the WHS
profit from 12% to 30+%. This decision has been called 'misleading and
unhelpful'. I wonder how much of this "distortion IMO" has been translated
into the current share price. Cheers Graeme
-----Original Message-----
From: Mark Hubbard <mhubbard@es.co.nz>
To: sharechat@sharechat.co.nz <sharechat@sharechat.co.nz>
Date: Friday, 14 July 2000 09:02
Subject: Re: [sharechat] WHS still undervalued


>-----
>From: Peter Maiden <pmaiden@today.com.au>
>
>> Based on NZ earnings alone my own DCF (at a modest risk rate) is 520-550
>per share. Add to that acquired Aust earnings at a higher risk rate over
all
>DCF is in excess of 900.
>
>
>I like your analysis Peter, but IMHO your DCF valuations are too high,
>especially the $9.00. My own DCF valuation, including Aussie (which
remember
>Tindell has stated will only slowly increase earnings per share) is a value
>range of about $4.90 through to $5.20.
>
>To get your values you must be using quite a low discount factor, and I
>suspect earnings growth of over 20% for the next 10 years. The company has
>managed earnings growth of 21% average over the last 7 years, I think for
>them to continue that now for the next 10 years is unrealistic. I suspect
NZ
>is almost saturated (this is where our opinions mainly differ I suspect) -
>also, remember that low NZ$ and the coming ERB (which for me, given the
>young staff, increases the discount factor that has to be used).
>
>Of course only time will tell which of us is right. It will be interesting
>to get others opinions.
>
>Cheers
>
>
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