Oh, she did mention P/E, which she derived from her 2008E NPV. She said "......trades at a 28% and 151% premium to our global nickel peers' 2008 P/E of 10.7x" ANTM's P/E will be 14.46x in 2008, which is 28% higher than their universe's P/E. During the last five years, the P/E varies widely.
And for the UNIVERSE word, i'm agree with you that it doesn't mean literally universe. That's why I'm questioning their scope of coverage, do they cover the whole ANTM's peers? I tried to revisit REUTERS and looks like they put ANTM in different industry compared to INCO. ANTM is for silver and gold, while INCO is metal mining. Now, my whole comparison doesn't make sense anymore as it is not apple to apple. Sigh, poor me! INCO: http://stocks.us.reuters.com/stocks/ratios.asp?symbol=INCO.JK&WTmodLOC=R2-Ratios-1-More Valuation Ratios Company Industry Sector S&P 500 P/E Ratio (TTM) 8.2313.7415.3720.84 P/E High - Last 5 Yrs. NM40.7444.0932.50 P/E Low - Last 5 Yrs. NM7.0210.6914.01 Beta 0.611.680.851.00 Price to Sales (TTM) 4.15 2.994.193.01 Price to Book (MRQ) 4.724.495.864.39 Price to Tangible Book (MRQ) 4.725.575.868.90 Price to Cash Flow (TTM) NM9.7715.4615.10 Price to Free Cash Flow (TTM) 7.1228.2416.9532.22 % Owned Institutions NM44.5037.28 71.16 uh, does INCO use hydrogen already? or just hydro power? hehehe... salam, barkah On Dec 9, 2007 10:20 AM, Felix Adi <[EMAIL PROTECTED]> wrote: > I'm pretty sure by universe ML meant similar stock (nickle mining companies) > that are covered by ML. such as Inco, Minara, BHP, etc. Not universe in > literal sense, hehe. > > Also when ML said ANTM is expensive, she never said anything about P/E. She > used NPV valuation. Which is valid because output of the company, should > remain the same. (future acquisition might change this, but since it is just > a rumour we should not take it into account). And income is heavily > influenced by > > 1. cost > which is why ANTM is so expensive with 100% diesel operated plants it is > very susceptible to increase in oil price in the future, compared to say > INCO who uses *hydrogen power* > 2. price of nickle > nickle price according to the report is not expected to increase much. > actually she uses declining nickle price as her model. $17.1/pound in 2007, > $12.00/pound in 2008, $11/pound in 2009 and $7 long term. Agree or disagree > with the analyst view, I'd rather be pessimistic rather than overly > optimistic when setting a target price. > > Now, in my view this is a sound report. If ML scenario is right, and nickle > price does decline then ANTM will be hit the most as its cost is > considerably higher than INCO. What if nickle price continued to increase? > What if ANTM acquires Newmont, what if .....? Well nothing is for sure in > this world. As a company ANTM is quite good (excellent growth and earning > throughout the years). But if you can buy the better company (INCO) why > waste your time with such a speculative stock. > As ANTM as of right now (without taking into consideration of future deals) > *IS* more expensive than its peers. > > Just my point of view > > Before blasting the analyst why don't you do your own NPV valuation first. > here's the formula > > http://www.investopedia.com/terms/n/npv.asp >
