Saturday, March 12, 2011

Pak Elektron Ltd. PAEL - Investment Case

Company PAEL
Company Name Pak Elektron Ltd.                       
Avg EPS 4.29
Avg EPS FV 30.67
EPS 1.68
EPS FV 12.00
Current Price 13.3
Quarter Third Quarter
Div 0
Div FV 0.00
Avg Div 0.29
Avg Div FV 2.04
Avg 23.79
Upside 78.84
Div Yield 0.00%
Book Value 74.22
P/E 7.92
P/BV 0.18
Sector Household Goods

Average yearly EPS = Rs 4.29
Last four quarters EPS = Rs 1.68
Last four quarters EPS is lower than the average annual EPS. Company is obviously, currently, not doing as well as it use to.
P/E is 7.92, a bit higher than some of the other, better, available options.
Fair value based on average annual EPS = Rs. 30.67
Last closing price = Rs. 13.3
The fair value based of average yearly EPS is higher than the last closing prrice, so it is a potential investment case.
Fair value based on last 12 monthe EPS = Rs. 12.00
Now this is lower than the last closing price, thus indicating negativity towards investment in PAEL.
Company has paid no dividend during the last 12 months, so a fair value cannot be calculated on that basis, and so is the case with dividend yield.
Average dividend paid since 2004 comes to Rs. 0.29 and this gives us a fair value of Rs. 2.04, which is a red indicator for investment in PAEL shares.
Book value for PAEL is Rs. 74.22, which is higher then last closing price, plus the P/BV is a lucrative 0.18. Green indicator here.
If we calculate an average based on the fair values, mentioned above, plus add book value to the pudding, it comes out as Rs. 23.79, which gives an upside potential of 78.84% to the last trading price. So the judgment is that it is okay to invest in PAEL. Personally I feel comfortable in a company if its upside potential is higher than 100%.



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