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Non-Tech : ACLN Ltd (NASD:ACLNF) -- Ignore unavailable to you. Want to Upgrade?

To: Frank McVerry who wrote (6)	9/29/1999 2:12:00 PM
From: Frank McVerry	Read Replies (1) \| Respond to of 41

VALUATIONS Here are 3 different valuations for ACLNF (1) PEG valuation The 'peg' ( PE ratio/(% annualized earnings Growth) ) valuation is a well-respected stock valuation method. 'Fair' value for a stock is normally considered to be when peg is unity (ie the PE ratio equals the stock's annualized earnings growth rate).The longer the period over which the growth is measured, the more believable is the result (in other words, a one or two quarter 'spike' in earnings growth should not be used in this valuation !). A five-year period for measuring growth is usually considered long enough to give an accurate measure of a company's true growth. For ACLNF, this 5 year annualized earnings growth has been about 29%. The PE ratio recently was 6.12 (price of $15.25). This means the 'peg' for ACLNF is 6.12/29 = 0.21. If 'fair' value means the 'peg' should equal one, then a 'fair' value for ACLNF ,based on the 'peg' valuation is 15.25/0.21 = $72.62 PEG VALUATION = $72 (2) Sector valuation Another valuation to place on a stock is to base it on the financial performance of its industry sector. The problem with this method is the stock is being valued as the 'average' stock in its sector, even though it may well be an above-average performer, resulting in a conservative valuation. ACLNF is in the water transportation sub-sector of the transportation industry sector. Here, the average PE ratio for these stocks is 21.6 (source:Provestor) . So if ACLNF had this 'average' PE ratio, its price would be 15.25/(6.12/21.6) = $53.82 SECTOR VALUATION = $53 (3) Analysts' valuations If many analysts follow a stock, some weight could be given to the average valuation, as we could expect that a number of such professionals tracking the stock, would have considered every possible aspect of company performance in their valuations. In the case of ACLNF, I can find only one analyst with a recent valuation (Midwood Research) and I quote his valuation here which he states, represents about half of the 'peer group multiple'. ANALYST VALUATION = $25 FWIW, Frank