Testing 1-Valuation Laugfs

I have little understanding how the valuation is carried out in practice. So tell me whether this calculation is correct or wrong,, If wrong please correct me,,

Laugfs company diluted eps for 9 month period enditng 31/12/2010 is 2.40

SO i converted this to annaul (dnt know whether i am correct) 2.4/9*12 = 3.2
Industry P/E is for Power n energy is 59.8

So is that correct to do like this 3.2 * 59.8 = 191

Company's P/E is almost ranges 16-20 now. So can we come to a conclusion that Laugfs share is undervalued currently and has potential to go up in the future and Company P/E is low bcaz it is just introduced to the market???????????????

Pls help me

Someone pls hlp me,,, I am trying to learn these things

ndnk wrote:Someone pls hlp me,,, I am trying to learn these things

It's unfair to calculate the value of LGL on sector PE ratio 59. Sector PE ratio for power and energy is high due to poor perfomance by LIOC last year. I think it's better to calucate based on PE ratio lower than the market PE.

Monster wrote:

ndnk wrote:Someone pls hlp me,,, I am trying to learn these things

It's unfair to calculate the value of LGL on sector PE ratio 59. Sector PE ratio for power and energy is high due to poor perfomance by LIOC last year. I think it's better to calucate based on PE ratio lower than the market PE.

wat would be the better P/E to be used?

And is my calculation ok? nothing wrong with that?

Just go through this,
http://www.lsl.lk/admin/doc_resrch/d_110221004356.pdf

You can get the market trailing and forward PER by each sector.

OMG PER = 59.8 ?????

Thats totally misleading ....

I normally take entire market PER in these cases...

PER of 20 is saying to be fairly valued. But for me, I take as 15 for fairly valued ratio.

BenZ wrote:OMG PER = 59.8 ?????

Thats totally misleading ....

I normally take entire market PER in these cases...

PER of 20 is saying to be fairly valued. But for me, I take as 15 for fairly valued ratio.

whats the rationale for 15 and 20? how did u get those?

ndnk wrote:

BenZ wrote:OMG PER = 59.8 ?????

Thats totally misleading ....

I normally take entire market PER in these cases...

PER of 20 is saying to be fairly valued. But for me, I take as 15 for fairly valued ratio.

whats the rationale for 15 and 20? how did u get those?

I agree with BenZ, Market PER is 20. So, it's always better calculate based on below the current market PER. But you should not forget, PER is not only a factor when you deciding valuation. Just look at mark's comment

mark wrote:many people use this method as the primary evaluation method.....
but there is some more factors.....
*future growth
*fiscal policies(BANKS)
*speculation(expected events-mergers/takeovers)
*attractiveness of the industry(hotels-trade at higher PE)
* liquidness
*leverage
*NAV
*stability of the company
*recent price performance of shares
ETC....................

if you think Rs. 191/= is a good value to dispose in the short term, and buy now you may ended up with big cash locked with LGL

Gaja wrote:if you think Rs. 191/= is a good value to dispose in the short term, and buy now you may ended up with big cash locked with LGL

No no i hav no intention to buy at this level,, I subscribed for the IPO anyway,,, i just thought of testing wat i have learnt,,,, It seems they r not practicle

Hi Guys
Since I was never educated in these matters formally I took a different path on calculating the sector P/Es. I still don't know whether it is correct or not, but what I do is to remove the statistics that are way outside the median and then re-calculate the mean.

They used LLUB per at the time to value LGL IPO price which was around 13 as i remember.

http://biz.yahoo.com/p/industries.html for US sector pers

Our current Ratios
http://www.4shared.com/document/fnJtvlST/Market_PE-Updates.html

gann wrote:
Our current Ratios
http://www.4shared.com/document/fnJtvlST/Market_PE-Updates.html

Not upto date!!!

LGL last qtr EPS is 1.23. But above indicates that as 0.85

ndnk wrote:I have little understanding how the valuation is carried out in practice. So tell me whether this calculation is correct or wrong,, If wrong please correct me,,

Laugfs company diluted eps for 9 month period enditng 31/12/2010 is 2.40

SO i converted this to annaul (dnt know whether i am correct) 2.4/9*12 = 3.2
Industry P/E is for Power n energy is 59.8

So is that correct to do like this 3.2 * 59.8 = 191

Company's P/E is almost ranges 16-20 now. So can we come to a conclusion that Laugfs share is undervalued currently and has potential to go up in the future and Company P/E is low bcaz it is just introduced to the market???????????????

Pls help me

The Power Energy PE of 59 is not accurate on CSE and will be updated this month I guess. I am sure it is along the lines of the market PE. Even if so is not good to take Sector PE to the fullest ( especially if it over the market PE as in this example) .

So even with PE of 20 which is too high Laugf cane be valued at 3.2*20= Rs 64 in my opion.

However as laghf is diversifying special attention can be given. But their core business ( gas) is volatile due to government competition now.
So in summary I do not think Laugh if undervalued now but fair valued. Better watch for future developments to judge where laugf is heading.


Hope this is helpful

I think LGL is fairly valued at 50-55.

slstock wrote:

ndnk wrote:I have little understanding how the valuation is carried out in practice. So tell me whether this calculation is correct or wrong,, If wrong please correct me,,

Laugfs company diluted eps for 9 month period enditng 31/12/2010 is 2.40

SO i converted this to annaul (dnt know whether i am correct) 2.4/9*12 = 3.2
Industry P/E is for Power n energy is 59.8

So is that correct to do like this 3.2 * 59.8 = 191

Company's P/E is almost ranges 16-20 now. So can we come to a conclusion that Laugfs share is undervalued currently and has potential to go up in the future and Company P/E is low bcaz it is just introduced to the market???????????????

Pls help me

The Power Energy PE of 59 is not accurate on CSE and will be updated this month I guess. I am sure it is along the lines of the market PE. Even if so is not good to take Sector PE to the fullest ( especially if it over the market PE as in this example) .

So even with PE of 20 which is too high Laugf cane be valued at 3.2*20= Rs 64 in my opion.

However as laghf is diversifying special attention can be given. But their core business ( gas) is volatile due to government competition now.
So in summary I do not think Laugh if undervalued now but fair valued. Better watch for future developments to judge where laugf is heading.


Hope this is helpful

Here, ndnk has done a mistake by considering the company EPS. Normally what we consider is Group EPS. For ndnk its perfectly OK as he is new to the subject. But its sad to see all others are commenting based on the EPS of 3.2. Then again its nice to see ppl giving + rep for predictions based on wrong data!!

Based on group figures, LGL 9 month ended EPS is 2.82 with last quarter EPS being 1.23. So we can get annualized EPS as 2.82*4/3= 3.76

But based on past qtr EPS, we can get annualized EPS of at least 4. So with PER of 20 it can trade around 80.

econ wrote:I think LGL is fairly valued at 50-55.

Based on what?

dhamm wrote:

slstock wrote:

ndnk wrote:I have little understanding how the valuation is carried out in practice. So tell me whether this calculation is correct or wrong,, If wrong please correct me,,

Laugfs company diluted eps for 9 month period enditng 31/12/2010 is 2.40

SO i converted this to annaul (dnt know whether i am correct) 2.4/9*12 = 3.2
Industry P/E is for Power n energy is 59.8

So is that correct to do like this 3.2 * 59.8 = 191

Company's P/E is almost ranges 16-20 now. So can we come to a conclusion that Laugfs share is undervalued currently and has potential to go up in the future and Company P/E is low bcaz it is just introduced to the market???????????????

Pls help me

The Power Energy PE of 59 is not accurate on CSE and will be updated this month I guess. I am sure it is along the lines of the market PE. Even if so is not good to take Sector PE to the fullest ( especially if it over the market PE as in this example) .

So even with PE of 20 which is too high Laugf cane be valued at 3.2*20= Rs 64 in my opion.

However as laghf is diversifying special attention can be given. But their core business ( gas) is volatile due to government competition now.
So in summary I do not think Laugh if undervalued now but fair valued. Better watch for future developments to judge where laugf is heading.


Hope this is helpful

Here, ndnk has done a mistake by considering the company EPS. Normally what we consider is Group EPS. For ndnk its perfectly OK as he is new to the subject. But its sad to see all others are commenting based on the EPS of 3.2. Then again its nice to see ppl giving + rep for predictions based on wrong data!!

Based on group figures, LGL 9 month ended EPS is 2.82 with last quarter EPS being 1.23. So we can get annualized EPS as 2.82*4/3= 3.76

But based on past qtr EPS, we can get annualized EPS of at least 4. So with PER of 20 it can trade around 80.

Thank u very much,,,nice explaination but what is P/E 20? How did u get it Can u pls explain

ndnk,
PE 20 is market PE. i.e. PE of entire CSE. You can use it to get an idea. But no guarantee the stock will trade upto market PE. hope this helps.

dhamm wrote:


Here, ndnk has done a mistake by considering the company EPS. Normally what we consider is Group EPS. For ndnk its perfectly OK as he is new to the subject. But its sad to see all others are commenting based on the EPS of 3.2. Then again its nice to see ppl giving + rep for predictions based on wrong data!!

Based on group figures, LGL 9 month ended EPS is 2.82 with last quarter EPS being 1.23. So we can get annualized EPS as 2.82*4/3= 3.76

But based on past qtr EPS, we can get annualized EPS of at least 4. So with PER of 20 it can trade around 80.

Dhamm,

I presume you are holding this share . Yes Last quarter EPS was 1.23. 9 Month EPs was 2.8 Yes I made a mistake by assuming and quoting the NDNK annualized EPS as 3.2 . Even if you take that they are going to post same EPS of 1.2 next quarter ( q4) their annual is Rs 4 EPS.

It is not safe to assume Market PE of 20 to fairly value every share share. It is risky. As you seem to be sensitive to price quotation I will not again quote a value. But every thing else I said in my previous post I stand by ( but I stand corrected for annulzied EPS but that too is open for discussion)

We are people who spend time to help others with whatever knowledge experience we have. We are not experts. Occasionally as humans we make little mistakes. We do not do it intentiannly. Don;t jump on the people who occasionally make a mistake. In which case just point out without being too quick to criticize. If I recall I have replied to your queries when ever you needed info to share my views.

I stand by every thing I said before abotu Laugfs. Safest thing I would like to says as I said before is "Laugfs is diversifying special attention can be given. But their core business ( gas) is volatile due to government competition now. Better watch for future developments to judge where laugf is heading."

Just for you information the same sector stock LIOC have made decent profits last 2 quarters. It is trading at Rs 18-20 now. it is tradin below a PE of 10 . The question is why?

slstock wrote:

dhamm wrote:


Here, ndnk has done a mistake by considering the company EPS. Normally what we consider is Group EPS. For ndnk its perfectly OK as he is new to the subject. But its sad to see all others are commenting based on the EPS of 3.2. Then again its nice to see ppl giving + rep for predictions based on wrong data!!

Based on group figures, LGL 9 month ended EPS is 2.82 with last quarter EPS being 1.23. So we can get annualized EPS as 2.82*4/3= 3.76

But based on past qtr EPS, we can get annualized EPS of at least 4. So with PER of 20 it can trade around 80.

Dhamm,

I presume you are holding this share . Yes Last quarter EPS was 1.23. 9 Month EPs was 2.8 Yes I made a mistake by assuming and quoting the NDNK annualized EPS as 3.2 . Even if you take that they are going to post same EPS of 1.2 next quarter ( q4) their annual is Rs 4 EPS.

It is not safe to assume Market PE of 20 to fairly value every share share. It is risky. As you seem to be sensitive to price quotation I will not again quote a value. But every thing else I said in my previous post I stand by ( but I stand corrected for annulzied EPS but that too is open for discussion)

We are people who spend time to help others with whatever knowledge experience we have. We are not experts. Occasionally as humans we make little mistakes. We do not do it intentiannly. Don;t jump on the people who occasionally make a mistake. In which case just point out without being too quick to criticize. If I recall I have replied to your queries when ever you needed info to share my views.

I stand by every thing I said before abotu Laugfs. Safest thing I would like to says as I said before is "Laugfs is diversifying special attention can be given. But their core business ( gas) is volatile due to government competition now. Better watch for future developments to judge where laugf is heading."

Just for you information the same sector stock LIOC have made decent profits last 2 quarters. It is trading at Rs 18-20 now. it is tradin below a PE of 10 . The question is why?

Dear Slstock,

Its true, ppl do mistakes and even experts do mistakes. My concern was not that and based on a small mistake the entire discussion was dragging into some where else and its going to end in controversial decisions. I criticized not that mistake but the behavior of others because there are bunch of ppl who give +/- blindly in this forum and its obviously not relevant to you. Then again im sorry bro if you hurt .