| Company | FFBL |
| Company Name | Fauji Fertilizer Bin Qasim |
| EPS | 5.26 |
| Fair Price | 37.57 |
| Current Price | 42.27 |
| Upside Potential | -11.12 |
| Quarter | 21-Oct-2010 |
| Div | 5.3 |
| Fair Value | 37.86 |
| Upside Pot | -10.44 |
| Avg | 28.58 |
| Upside | -32.40 |
| Div Yield | 12.54% |
| Book Value | 10.3 |
| OCF/S | -3.20 |
| P/E | 8.04 |
| P/BV | 4.10 |
| P/CF | -13.21 |
| Sector | Chemicals |
FFBLs last four quarters EPS is 5.26. If we calculate a fair value based on that data, the the fair value comes out as Rs 37.57, which is below its last closing price of Rs 42.27. Its P/E also comes at 8.04 which is quiet high. So no buying indication here. Lets now move to its dividend. During the past four quarters FFBL has paid Rs 5.30 per share as dividend. If we calculate a fair value based on ite dividend payout, it comes out to be Rs 37.86, still not good for investment at this point in time (although its dividend yield of 12.54% is very good). Next lets check its book value, which is Rs 10.3 which gives a P/BV of 4.10 showing that at curent price level it is trading at 4 times its book value. All the above gives an average price of Rs 28.58, still not good enough candidate for investment. Moving to operating cash flow per share, the data I was able to obtain shows it at Rs -3.20, still not good.
So from value investor (add contrarian's to the list too) point of view, I would not buy FFBL at current price level. What the company will announce in future, I don't know, all I know is what the company has announced so far. Where the price will go tomorrow, next week, next month; I don't know (I don't have faith in technical analysis either, chats just plainly don't work). I don't speculate, nor am I a growth stocks investor. I personally have not a single share of FFBL in my portfolio (I personally have nothing against this company and if its price comes down significantly, I wouldn't mind investing in it), but at current levels, it definitely is overvalued and overpriced. So if you are in profit better sell it after its announcement (which is expected on Tuesday) and play safe. Now one thing with this advice, it is possible that the share price may go up after you have sold your holding and then you might regret having let it go cheap. So it is up to you, think well before taking a decision. What I can tell you with any conviction is that (from value investors point of view) FFBL is definitely overpriced currently.
Hope that was of some help!
Best of luck and happy investing!
FFBL - Investment Case
