RE:Intrinsic value - fair value per shareKEY POINT: "when we sign the first contract I will provide a new valuation...."
a torch contract, even if only modest, would change that final intrinsic value number SIGNIFICANTLY, imho...
claudemc wrote: For those asking, while this is based on the guidance provided and assuming Peter meets the guidance of .11 eps by year end that he provided, here is the current fair value and reasoning for the inputted values
EPS of .11 (this is without any additional funds or contracts which we already received additional after this guidance was provided of $2.4mm from HPQ IP agreement so I would say .11 is pretty much guaranteed and also conservative)
Discount rate of 15% (this is expected return, for me this is very conservative as I am already way past that)
Growth rate of 20% over the next 15 years - here I need to make some assumptions of course as any investor would, my assumptions are that we will get iron ore torch contracts and other GHG emissions reduction torch sales over the next 15 years that will easily provide for a conservative 20% growth over that period.
Terminal growth rate of 5% - this is slightly higher than you might put in here but I am accounting here for the additional divisions also taking off over the next 15 years, I did not account for those divisions in the 15 year Growth rate.
Margin of Safety at 10% - other investors would use a higher MOS but for me this company is significantly de risked, I am very comfortable with a lower MOS.
This all translates (don't ask me to show you the formulas, it's built in to the calculator) but it translates to current Intrinsic value per share of $4.10 (after adjusting the MOS).
Basically this tells me as an investor that anything under $4 at this time is a great price, when we sign the first contract I will provide a new valuation. Feel free to use your own numbers to input, you may be comfortable with lower or higher rates depending on your risk capacity.
For your further enjoyment here is a link to the calculator I use for these purposes.
Trade Brains - Fair Value Calculator
stay safe!