Topalov
27 Sep 2016
Re: Share price comparison Tad,Apart from the greater size of Randgold there are three other reasons I can think of why there are different valuations:1. Sovereign risk - South Africa is seen as a high risk environment by many. 2. Amount of resources. mines are depleting assets and so P/E ratios should be lower than other companies to allow for this in my opinion. The presentation indicates PAF does has a reasonable minelife but I have not checked Randgolds mine life3. Balance sheet - ie how much debt. This is clearly not a problem for PAF. PAF has long term liabities and deferred tax of around £60m, or over two years of the profits earned last year. Again I don't know Randgolds liabilities.I would certainly rather own PAF than Randgold, but other factors do play a part..
Topalov
27 Sep 2016
Re: share price Hi Tad,It appears that my assumption that the purchase price was at approximately the market price as at June 7th was wrong! Unless I am missing something PAF was able to buy back its shares at a huge discount to the market price. I have emailed the company to ask for clarification as to the consideration paid and the amount agreed per share. If only 8.14p was paid then that is an exceptionally good deal for PAF shareholders. You have to wander why someone would agree to sell at that price.The reason I believe the market has factored in the Shanduka transaction is simply because the information is in the public domain and therefore the market will have factored it in. Off course the market is known to be wrong on company valuations - which is what we all assume and therefore are holders of PAF.I rely on stockopedia for my company info and this is showing the forward P?E for PAF to be 7.2. Most people would agree this is cheap - and it pays a good divi which is also a plus. Stockopiedia have a system called Stockranks which as the name implies ranks every stock from 1 to 100 based on back tested metrics. The performance since inception (only around three years so a small time period) has been very good. PAF is currently has a ranking of 92, so in the top decile of London listed shares.For those who may be interested other highly ranked gold stocks include:TSG 97Centamin 96HGM 94SRB 88Poly 87AAZ 86
Taddish
27 Sep 2016
Re: Share price comparison Try the comparison with Randgold again ...!
Taddish
27 Sep 2016
Share price comparison PAF compared to Randgold - very similar price action.Now let's compare PE ratios and dividends
an African for year to jun 30 2016 ... PE 14.54 , dividend 4% forecast for current financial year ... PE 6.5 , dividend 4.3%Randgold for year to Dec 31 2015 ... PE 50.47, dividend 0.64% forecast for current financial year ... PE 32.3 , dividend 0.7%these measures, Randgold is priced 4 times higher than Pan African.So where if anywhere is the extra value?It's an unfair comparison in a way because most institutions are prevented in investing in small companies (based on market cap). Then again, if PAFs market valuation was 4 times higher, they could!Tad
Taddish
26 Sep 2016
Re: share price Apologies, my last paragraph has errors and is poorly written - please replace with this:-So I draw from this analysis that the reduction in shares on issue is not yet factored into the share price. Taking 20p as the baseline, that would imply a 3.4p uplift to the share price to reach fair value. And that's before any further gold price appreciation or improvements in performance the company achieve in the coming months.Tad
