Understanding AFF Valuation?
I said easy double yesterday, referencing my thoughts on valuation.
Current price 78p doesn’t even compare to the simpliest value that this company should command and is most undervalued compared to its peers in the same region.
My simple value, is the C$90M Cash and Nkout 5% NAV of the PEA for C$230M ($320M / 105M o/s shares = C$3.04 or 195p at exchange 1.56)
Even the Analysts are all over the map:
| Investec BUY | Hunter Hillcoat | 107p |
| GMP Europe BUY | Matt Fernley | 210p |
| RBC OUTPERFORM | Patrick Morton | 200p |
| Panmure Gordon BUY | Alison Turner | 279p |
| Rencap BUY | Jim Taylor | 85p |
| SP Angel BUY | Carole Ferguson | 125p |
(from Jan’13 Corporate Presentation)
Hard to understand SP less than 80p with Takeover Talks since the New Year, 5 Buy Ratings and 1 Outperform. The Market doesn’t believe in the AFF Asset Base? The Market doesn’t believe in a possible Takeover? The Market doesn’t believe in a business combination for Joint Venture.
Today, Affero Assets less Cash are valued at C$35M (SP 76p), less than 1% the Nkout NAV. Why?
Cheers, Mark