Thanks John, appreciate you taking the time to reply and for your kind words.

It’ll be an ongoing process learning how best to construct the DCF, but I think holding on to the principles and purpose of the valuation model is the most important thing.

I wasn’t aware of this, no. It’s a valid point as to the value of this move, however that article mentions that the site was purchased in 2019 for this purpose and the company has only grown (well!) since then, so perhaps can be argued that it was a sensible choice.

Thanks for bringing it to my attention.

Thanks for your thoughts, Bob. And I appreciate the kind words!

Good summary. I’ve used a similar approach (discounted dividend models) for about five years and I do think these models (cash flow or dividend-based) are useful, especially in terms of coming up with a stable valuation versus the usual price-earnings ratio approach, which can be affected by the ups and downs of last year’s earnings.

This type of thinking is also used by a couple of my favourite fund managers, Nick Train and also Ian Lance & Nick Purves, both of whom use models that forecast earnings growth out to some future “normal” year within the medium-term (5-8 years), and then come up with a valuation based on a historically normal multiple of those “normal” future earnings.

It’s different to DCF and DDM models, but in the same ballpark.

Good luck with your return to blogging,

John

You’re most welcome, Simon.

Encouraging to hear your feedback about Alpha Group. Definitely one to look into further.

I will look into the others though.
Thank you for writing this up.

Cheers Nick!