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EBO-Ebos

Started by Shareguy, Jul 02, 2022, 06:36 AM

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Shareguy

I agree with Craig's and have been acquiring on weakness. Ebos is now one of my largest positions.


winner (n)


Shareguy

Well, I have continued buying and now have enough. Great quality company and I think good buying at these levels.

BlackPeter

Quote from: Shareguy on Oct 13, 2022, 11:42 AMWell, I have continued buying and now have enough. Great quality company and I think good buying at these levels.

Good luck.

They are on my watchlist, but admittedly - they don't look that cheap so far. Backwards PE is 40, Forward PE still above 21 with an earnings CAGR of 10. I guess that's fair valued, but not really cheap, isn't it?

Sure, they are one of these companies always looking too dear, but who knows, that's what they said about FPH and XRO as well, and look how far they dropped.

winner (n)

Quote from: BlackPeter on Oct 13, 2022, 02:10 PMGood luck.

They are on my watchlist, but admittedly - they don't look that cheap so far. Backwards PE is 40, Forward PE still above 21 with an earnings CAGR of 10. I guess that's fair valued, but not really cheap, isn't it?

Sure, they are one of these companies always looking too dear, but who knows, that's what they said about FPH and XRO as well, and look how far they dropped.

My spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

Gerald

Quote from: winner (n) on Oct 13, 2022, 02:30 PMMy spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

How do you reach that 40% EPS growth? Lifehealthcare was going to add "low double digit eps accretion" so say 13% plus 6 or 7% organic growth from the business / minor acquisitions.

I'm not too sure how to think about organic growth from the core buisiness as people seem to forget not long ago this had almost no eps/revenue growth for 3 years straight.

Also the relative opportunity set has changed recently. You could buy this on a ~4% earnings yeild and take equity risk for mid single digits growth or you could buy something like a 30y UK government bond yeilding 5% to maturity, or even shorter term stuff with 7 or 8% without stretching into garbage.

In saying that im sure ebos will continue to do well, i'll keep holding onto mine.

winner (n)

Quote from: Gerald on Oct 13, 2022, 08:19 PMHow do you reach that 40% EPS growth? Lifehealthcare was going to add "low double digit eps accretion" so say 13% plus 6 or 7% organic growth from the business / minor acquisitions.

I'm not too sure how to think about organic growth from the core buisiness as people seem to forget not long ago this had almost no eps/revenue growth for 3 years straight.

Also the relative opportunity set has changed recently. You could buy this on a ~4% earnings yeild and take equity risk for mid single digits growth or you could buy something like a 30y UK government bond yeilding 5% to maturity, or even shorter term stuff with 7 or 8% without stretching into garbage.

In saying that im sure ebos will continue to do well, i'll keep holding onto mine.

Maybe I shouldn't look at crap sites like marketscreener

They have F22 eps of 127 increasing to 170 (profit going from 226m to 313m

Sounds good ...what I want to hear so I'll believe it ...isn't that how the investing mind works

Shareguy

#23
Craigs have 2023 EPS at $1.47

Fbar have 2023 EPS at $1.57

Forbar released a report overnight of the top five dividend growers. They have EBOS as one of the highest and most consistent dividend growth stocks at 12 1/2% over the last 10 years.

winner (n)

#24
Whatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

The red EPS line is also a 'proxy' for where the share price would be at an PE of about 21

You cannot view this attachment.


Shareguy

Quote from: winner (n) on Oct 14, 2022, 09:06 AMWhatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

You cannot view this attachment.



Yes . Great chart all right . Says it all

BlackPeter

Quote from: winner (n) on Oct 13, 2022, 02:30 PMMy spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

Hmm - this peaked my interest. You sure your spreadsheet shows 19?

Average EPS over the last 10 years (2013 to 2022, both inclusive) was 91 cents per share.
Current SP is $36.21;

2022 $1.15
2021 $1.13
2020 $1.10
2019 $0.95
2018 $0.99
2017 $0.88
2016 $0.89
2015 $0.78
2014 $0.69
2013 $0.58

Unless there are wrong EPS entries in my spreadsheet (pobody is nerfect) ... am I not sure, how this could result into a different PE other than 39.8?

I really don't want to go 10 years back through annual reports - so, please show me which entry (copied above) is wrong?

winner (n)

Hey BP - I can now see what you mean when you talk 'backwards PE' taking average EPS and applying to current share price. Methodology always going to give a big number isn't it, esp if eps growing. I take it when you talk forward PE you average projected EPS and apply to current share price?

My average PE (about 19 over 10 years or 22 over 5 years) is taking the average of the PE's over time (calculated on monthly closes)

So just different ways of looking at things - whatevr one is comfortable with eh

Your EPS numbers a bit different from mine for the last few years - yours not in A$ are they as they report in that currency.

BlackPeter

#28
Quote from: winner (n) on Oct 14, 2022, 02:20 PMHey BP - I can now see what you mean when you talk 'backwards PE' taking average EPS and applying to current share price. Methodology always going to give a big number isn't it, esp if eps growing. I take it when you talk forward PE you average projected EPS and apply to current share price?

My average PE (about 19 over 10 years or 22 over 5 years) is taking the average of the PE's over time (calculated on monthly closes)

So just different ways of looking at things - whatevr one is comfortable with eh

Your EPS numbers a bit different from mine for the last few years - yours not in A$ are they as they report in that currency.

yes (looking at my method to create backward - and forward - PE) and yes (to using NZD for Ebos).

Re PE - how would you otherwise generate a forward PE (given you don't know the future prices, unless of course you take for that the consensus, but then dividing the number of words in the Sunday horoscope by the actual date might give a better forecast;

... and you are right ... your method clearly will generate a different value (but should not matter as long as we compare only apples with apples).

I like with my method, that a dropping share price immediately reduces the PE. With your method it is just a historic set of data (independent of the current share price, which does not really help in the purchasing decision ... but you are right - my method clearly will generate larger backward PE's.

For Ebos I use whatever they report divided by the actual exchange rate, given that I follow the NZX stock. Should however not matter, given that I mainly work with ratios ...

Anyway - good you followed up and clarified that. Cheers.

Ferg

Nice work.  At the risk of stating the obvious it appears the SP got ahead of itself through 2020 and 2021.  Now we are seeing a reversion to the mean.....is that your interpretation?

Thanks for that.

Quote from: winner (n) on Oct 14, 2022, 09:06 AMWhatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

The red EPS line is also a 'proxy' for where the share price would be at an PE of about 21

You cannot view this attachment.