Futher analysis on KRO
From the links at Yahoo!
https://finance.yahoo.com/q/is?s=KRO
The cost of revenue is about 81%.
If a company with 13% market share, with cost of revenue close to 81%of revenue, can command PE of 39, what should Argex command?
What if Argex can have 30% of market share, with cost of revenue close to 0% (assuming vanadium will pay for it), or even negative (vanadium itself will be profitable and thus negative cost, if we add iron, it will be even more negative cost), what kind of PE should Argex command? Number too large to display here.
Even suddenly, iron and vanadium disappeared in La Blache, or the management decided to donate iron and vanadium for charity, the cost of revenue for Argex will be at most 30% of revenue, should be realistically around 10% to 15% of revenue due to the high grade. What kind of PE should Argex have if they keep titanium only? 90 or 180?
Note that the rate of return is so high (triple digit), Argex should command a very high PE.