American International Group (AIG) – Analysis 2016-02-06

AIG increases value for its shareholders thru buy backs and dividends. The compounded annual growth rate was 6,15% last 3 years. AIG's goal is to grow its book value by 10% a year. ROE target long term is 10%.

What is this business worth?

Asset value:
Tangible book value per share is currently at 79,4 USD/share. If they can create value of 10% a year thru buy backs and dividends, book value should be met, leaving an upside of 49%. Further value can be created if the company is to be split up, with Icahn as the main driver.

Earnings power value:
Earnings have to come up to a 10% ROE to justify book value. Right now a 3% downside looking at the 5yEPV.

Disclosure: The author had no position when this post/analysis was written.

AIG 2016-02-06

AIG 2016-02-06

Buenaventura (BVN) – Analysis 2016-02-06

Weak gold and silver prices have pressured earnings and return on capital last couple of years. Finances are stable with a high equity ratio. CEO is a big owner of shares aligning interests with shareholders. Great upside if you believe gold and silver prices will revert up.

What is this business worth?

Asset value:
TBVPS equals 175% upside.

Earnings power value:
Last 5 years earnings average equals 132% upside.
Last 10 years earnings average equals 187% upside.

Disclosure: The author had a long position when this post/analysis was written.

BVN 2016-02-06

BVN 2016-02-06

Cnooc (CEO) – Analysis 2015-09-26

Cnooc LTD (CEO) has been compounding its book at an unbelievable rate of 17,3% on average per year during the last 10 years. Include last years dividend and you get 24,54% as a total annual return.

What is the value of the business?

Asset value:
With an annual book value growth at 17%, an annual investor requirement at 10%, and a current price to tangible book at 0,79, the remaining upside is 211% motivating a share price of 316 USD/share.

Earnings power value:
5yEPV upside of 81%.
10yEPV upside of 53%.

Disclosure: The author had a long position when this post/analysis was written.

CEO-2015-09-26CEO 2015-09-26

Buenaventura (BVN) – Analysis 2015-07-26

Weak gold and silver prices have pressured earnings and return on capital last couple of years. Finances are stable with a high equity ratio. CEO is a big owner of shares aligning interests with shareholders. Great upside if you believe gold and silver prices will revert up.

What is this business worth?

Asset value:
TBVPS equals 78% upside.

Earnings power value:
Last 5 years earnings average equals 51% upside.
Last 10 years earnings average equals 84% upside.

Disclosure: The author had a long position when this post/analysis was written.

BVN-2015-07-26BVN 2015-07-26

Bonheur (BON) – Analysis 2015-05-17

First quarter earnings 2015 are up year on year. Book value per share now at 265,09 NOK, increase of 8,12% since last quarter.

What is the value of the business?

Asset value: Massive upside. 4 times your money if you are happy with a 10 year annual average increase of book value at 9,37% + dividend.

Earnings power value: EPV 5 years which is the most pessimistic valuation, still have an upside of 3,22 times your money. Until that happens the 5y average EPV market currently give you a 32,17% return on your invested capital a year. Not bad.

Disclosure: The author had a long position when this post/analysis was written.

BON-2015-05-17BON 2015-05-17

Cnooc (CEO) – Analysis 2015-04-23

Cnooc LTD (CEO) has been compounding its book at an unbelievable rate of 20% on average per year during the last 10 years. Include last years dividend and you get 24,36% as a total annual return.

What is the value of the business?

Asset value:
With an annual book value growth at 20%, a 10% annual investor requirement, and a current price to tangible book at 1,29 the remaining upside is 89% motivating a share price of 319 USD/share.

Earnings power value:
5yEPV upside of 26%.
10y average EPV has a downside of 5%. Return on incremental equity last 10 years is at 10,54% explaining the increase of earnings over time thru good capital allocation.

Disclosure: The author had a long position when this post/analysis was written.

CEO-2015-04-23CEO 2015-04-23

Bellatrix Exploration (BXE) – Analysis 2015-04-22

Great book value growth last couple of years. Price does not reflect that growth. Also, Seth Klarman at Baupost is buying at current prices. Certainly is reassuring for me.

What is this business worth?

Asset value:
60% upside on tangible book.
456% upside looking at the last 5 years growth of book.

Earnings power value:
41% downside looking at average 5yEPV.
12% upside looking at average 3yEPV.
109% upside looking at last 12 months EPV.

Disclosure: The author had a long position when this post/analysis was written.

BXE-2015-04-22BXE 2015-04-22

Tethys Oil (TETY) – Analysis 2015-04-20

Financially strong and impressive book value growth last 5 years. Current oil price might be a good buy opportunity. A lot of cash on the balance sheet and have started to give cash back thru buybacks and dividend.

What is this business worth?

Asset value:
10 year average annual book value increase of 22,98%.
5 year average annual book value increase of 43,84%.
54% upside looking at the most pessimistic 10y annual average.

Earnings power value:
21% upside on 3y average.
14% downside on 5y average.

Disclosure: The author had no position when this post/analysis was written.

TETY-2015-04-20TETY 2015-04-20

DFDS – Analysis 2015-04-20

Market value has more than doubled since the beginning of 2013, from 3892 MDKK to 9146 MDKK today. Valuation to high?

- Continuous share buybacks at a high price.
- Goodwill growing from acquisitions.
- Share options diluting current shareholders - not connected to business fundamentals and no downside for the awarded employee.
- Low profitability.

What is this business worth?

Asset value:
Average book value growth at 4,29% annually last 10 years.
Motivated price based on that growth and a requirement of 10% return annually equals a price of 184 DKK/share, leaving a downside of 75%.

Earnings power value:
Income per share is based on comprehensive income. 10 year average ROE is at 6,58%.
10yEPV motivate a price around 285 DKK/share leaving a downside of 61%.

Disclosure: The author had no position when this post/analysis was written.

DFDS-2015-04-20DFDS 2015-04-20

Wilh. Wilhelmsen Holding (WWIB) – Analysis 2015-03-13

2014 was not a great year but book value keeps growing at a decent rate over time. Downside protection with a valuation at 0,57 * tangible book.

What is this business worth?

Asset value:
76% upside on tangible book value.
Last 10 years increase of book value shows an average of 10,13% yearly. 78% upside.

Earnings power value:
10yEPV equals an upside of 90%.
5yEPV equals an upside of 98%.

Disclosure: The author had no position when this post/analysis was written.

WWIB-2015-03-13WWIB 2015-03-13