Thursday, 8 July 2010

HELEN OF TROY (HELE) - Updated 8/7/2010

Earnings came in at around 0.60c against expectation of 58c Reported earnings were 59c including the impairment charge. Stripping out the impairment charge gives 60c underlying.

Historically the May quarter has the lowest earnings.

Net Income for the quarter was $18.3m. Extrapolating this at x4 provides for $73.2m in earnings. Market capitalization is $676m. This would be a simple PE of 9.23 excluding any growth.

EBITDA is $26.8m. Say $110m for the year. Using a discount rate of say 15% would provide a valuation of $733m. There is also a further $100m of assets after paying off all liabilities not to mention the property that the company hold. This would bring the valuation between $750 - 850m. About 10% higher than the current share price at a very conservative measure.

Update : Post results the stock has risen by around 5% to 23.17 (at the time of the posting) 8/7/2010.

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