When investing, I try to look at different scenario to give myself an estimate of how much it could be worth. I mainly look at 4 different markers to evaluate the value of a company 1- The values of the asset in their current state or liquidating value 2- The value of sale if someone were to purchase the asset or the replacement value 3- The multiple of revenue 4- The multiple of net profit In some case it is helpful to look at management qualities and potential long term developments. But my goal is to find a company that is worth more than what I would be paying for. You can always have new management and new ways of running the company but if assets are not there. It is more difficult to get some value. For point 3-4 I usually evaluate both, now and few years from now if I look at long term investments. The value of assets: Abcourt Recently got a loan on asset alone, not the mine, not the company, but the equipment. The loan was for 6.5 M$ and If we look at liquidating asset comparing to other company and the fact that the bank gave money. My own estimate is that the asset should be worth about 80M$ in their current state. They have all Equipement for 2 mines, a complete mill, lots of Equipement to restart a third mine that was value at 7M$. When we look at prices on the use market for all of their assets, It would give me a good 80M$ value should they decide to dismantle and sell all. Right now the whole company has a market cap of 40M$. Therefore, my guess is that it is worth twice as much as what I am paying for today. The selling value or the replacement value is sometimes a lot more interesting. Because that would happen in a case were someone needs our assets.
