Forum Archive Index - November 2000

["Brian Brakenridge" <brianbrak@xtra.co.nz>]

Hi Krypt:

 

In response to your query "what figures am I using ?" I went back to check and think I have screwed up. Last night I scanned my brokers research report on FRU and took EPS of 13c. In fact another look today shows me that that figure was actually Normalised Earnings and Reported Earnings were 7.7c. Thats what happens when you comment without doing your homework. Sorry.

 

So to recalculate PEG; current PE must be about 25, last night I used very conservative growth figure of 25% for the next 5 years which would give PEG of 1 indicating fair value. However if a growth figure of 40% is used (based on actual and forecast this is still conservative) we would get a PEG of .63

 

I'm still comfortable with the price and future potential.

 

How does this compare with your calculations. I need to read the "Zulu Principle" to take this concept further. I wonder if David Reid (our resident PEG exponent) has done these calculations?

 

Cheers, Brian