Peter W

Zinc Producer Horsehead Appears Very Undervalued

I applaud the young man's effort but simply stating the equity is undervalued and citing a few simple calculations from the balance sheet is NOT evidence of an undervalued company. There's a lot of sloppy analysis done in the investing world and this is more evidence of it. If the author wants to be taken seriously, he will explain whether he used an intrinsic or relative valuation technique and then detail what he feels to be the most important assumptions in his valuation. As an analyst at a hedge fund, if this was my pitch to the PM I'd get fired.

Zinc Producer Horsehead Appears Very Undervalued

Interesting idea but if the company is not earning a positive spread on its projects over its cost of capital the market may have the proper valuation. Based on my research, the market heavily discounts cash when it believes management will go on destroying shareholder value.

What are your estimates for ZINC's return on capital and cost of capital and how are you computing them?