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Online Share Trading

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Country Bird CBH

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Dutch
Frequent Contributor
Can someone help me with a projection of the current full year EPS and 1 year price target. Good prospect? Trading at a discount to it's listing price of R5.10?
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8 REPLIES 8
Samir
Super Contributor
CBH current EPS 31/03/07 of 54.5 c CBH estimated EPS 31/03/08 of 69.3 c Rainbow (pre-bid) and Astral have traded at discounts to the alsi of approx 45%. CBH should thus trade at about the same discount to the ALSI, seeing as it is same industry. So, last month, before listing, the alsi was at a PE of 15.6 thus a pe for CBH then would have been 7.8. Take that PE and the EPS of 54.5c gives u a price of R4.25. Current price is R4.80 so according to this theory, the price may drop to R4.25 but if that happens then you could grab more shares at a fwd pe of 6.13 which i would conside as cheap.
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Preston
Super Contributor
Dude (Samir) ..what profession are you in..... Excellent rationale
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Dutch
Frequent Contributor
Thanks Samir for your comprehensive reply
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asylum
Super Contributor
Hi Samir sorry for the stupid question but what formula did you use to get to a price of 4.25? Thanks
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Samir
Super Contributor
Hey chaps. listen. Im no chartist here... I am a CA though, if that adds any worth to my name. R4.25 was derived as follows: Pre-listing info gives actual EPS of 54.5c at 31/03/07. Since, CBH is a new listing,you look at its competitors Rainbow and Astral. Use Astral since Rainbow price was 'distorted' due to the offer to buy out. In APril, AStral price of R117.53 was on EPS of R12.86 which gave a PE of 9,1. At that time, the alsi was at a PE of 15.6 thus 9.1/15.6 = 58% discount. Now, 58% is not accurate as we are using a snap shot so i took an average for the year which came to 45%. This 45% means that the PE of Astral has been 45% of the PE of the alsi. In my previous note, I used a 50% discount because CBH is new on the JSE and I was being cautious. 50% vs 45% not a major trainsmash.. So, in following, I took the ALSI PE in April of 15.6 and applied the 50% discount to give me an expected PE of 7.8 (15.6 * 50%). Using this 7.8 and knowing that the march 07 EPS was 54.5c, I calculated a price at March/April of (54.5c x 7.8 =425c). Hope this explains.
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asylum
Super Contributor
Thanks a stack Samir for taking the time to explain in detail much appreciated. And i'm pretty sure youre CA credentials does help.
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Preston
Super Contributor
Samir. I kinda figure the CA part ...Probably from management accounting under Valaution of a company.....Your assumption of similiar industry require adjustment to "Ke".. I wasn't too sure ...that is why i asked. BUT I WAS RIGHT IN MY ASSUMPTION>
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Dutch
Frequent Contributor
Just seen that Bookrunner has the option to issue a further 9 354 966 shares on behalf of CBH within 30 days after listing date. Possibly a further 5% shares being issued. Not good for PE and current price I say
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