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?
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.