GREY:EORBF - Post by User
Comment by
RX4H1N1on Nov 30, 2011 3:46pm
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Post# 19280299
RE: ORT analyst upgrade
RE: ORT analyst upgrade
Valuation
(All dollar amounts are in Canadian dollars unless otherwise specified)
Our DCF-based fair value target of $12.20/share is 352% above the current price of $2.70. We
used a WACC of 12.5% based on the Company beta of 1.92 (instead of industry beta), a risk-free
rate for Canada of 3.0%, a market premium of 5% and a conservative perpetual growth rate of
3%. We estimate the debt-to-equity ratio will fall below 1% in the long term. We expect Orbite to
raise additional funds in the next few months for the construction of the full-scale SGA plant
scheduled for 2012. As equity markets are still fairly unstable, we estimate that Orbite will raise
funds at an average of $4.10/share and we used the 2012 forward number of shares of 210
million to determine the target price.
https://research.jacobsecurities.com/wp-content/uploads/2011/11/ORT-November-23-2011-Initiating-Coverage-JSI2.pdf