Been having a look at some investment opportunities as per normal...Premier investments...what is going on?? Has been going through the roof on some pretty ordinary fundamentals.
6% ROE...ordinary. Very expensive cost of equity (at a staggering 23%)...dividend yield is ok (at around 5%) but still not worthy of such a valuation.
In fact using my FCFE valuation(with a growth rate of 11% based on guidance), I get a price target of around $3.50 to $3.89...way lower than the current share price of around $11.
So what is going on? All I can think of is no one is selling their shares for some reason. And that is probably true. 4 groups of shareholders hold around 68% of the stock. Average volumes of turnover are 0.17% of the outstanding shares, compared to, say Myer, at 0.87%
"Stay true to Lew" I guess :-)
Note: Not a recommendation to buy/not to buy shares in Premier Investments. If pain persists, see your financial advisor.
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