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

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