If...
The market were to priced-in ITMG at 9,200...
Investors would effectively be expecting EVA growth, adjusted with sales (EVA momentum) to contract by -2.3% per year for the next 5 years.
For the past twelve months in Q2 2019,
EVA actually contracted by -2.5% compared to Q4 2018.
So, that seems to be a fair expectation*
But....
I have found that ITMG investors generally priced-in a more pessimistic outlook than reality.
Beware.
The good thing is...
At 9,200
The market is effectively viewing ITMG as a wealth destroyer..
Which is not true
So, fundamentally speaking...
If ITMG ever to trade at 9,200....
that would be a great deal.
Even if you know that investors tend to exaggerate,
which would drive share prices down further....
It is still a very good deal.
Unless....
Coal price goes down beyond 50 USD...
If it does...
You are screwed.
If you want to gain more understanding of ITMG past and current condition, read my previous analysis here.
*In reality, it would take a continued, persistent decline in coal prices for EVA momentum to be -2.3% for the next 5 years. But I have found that the market tends to be short-sighted: they look at recent data and extrapolate it. In a more formal style, the market is not efficient, but they adapt, adjusting their expectations as new data arrives (which is EVA related) – however wrong that is in the future.
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