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IP1 3001 Q3:b

Discussion in 'Financial Planning Study Group' started by Balin54, 9th Mar, 2011.

  1. Balin54

    Balin54 Member

    13th Jan, 2011
    Is anybody else having trouble understanding this question.? Just can't seem to get my head around this one. My calculations seem to be out. Need some immediate help fellow students.
  2. builder2818

    builder2818 Well-Known Member

    31st Dec, 2008
    I haven't handed my assignment in yet but I got the following figures:

    i). EPS = $0.29 per share P/E Ratio = 29.3

    ii). Fair value = $7.62 Calculated this by multiplying the industry P/E ratio (12.33) by the forecasted EPS (0.618). Saw an older example from the previous version of the module in this forum that someone calculated Woolworths shares the same way and they said it was assessed as correct.

    iii). I gave a 'hold' recommendation based on the heavy loss she took since buying the shares and other fundamental factors relevant to SUN that seem promising to the company not just relying on the P/E ratio as my decision (which the text says).

    Actual broker and analyst reviews on the stock give it a hold too, plus I am a technical trader so I mentioned some technical indicators that show it is well supported at current levels and it's comparison to stocks in the same industry (financials and insurance).

    Hope this helps, and if anyone else who has already received their assessed assignment back and it may be wrong, we would all appreciate the feedback.