Forum Archive Index - March 2002

["trader 100" <trader_100@hotmail.com>]

Peter

Thanks for your post - I always appreciate your analysis.  While I am 
devoting most of my time to learning more about TA I would be interested in 
some more background on your comments.  My questions are below your 
explanations:

If they closed down tomorrow and realised 50% of what they are worth
yheir value is about $0.95 per share. Eliminate the $40M of goodwill
this figure is about $0.73. Net tangible assets are about $1.46 per
share.

--> How do you come up with the $0.95 per share figure?


I tend to look at what performance is needed to cover the cost of
capital, ie creating value for shareholders. At $1.02 the market is
saying that THL is going to destroy another $140 million of
shareholder value in the future.

--> How do you come up with the $140m figure?

So what does THL need to do to cover it's cost of capital? Allowing
for both equity and debt about $21 million in after tax profits. At
this level of performance THL could demand a shareprice in excess of
$3.00

--> I assume the $21m was calculated using WACC.  Did you get Beta from PWC? 
  What formula have you used to calculate a shareprice of $3+ based on NPAT 
of $21m?

Thanks

T100


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