Replies to post #2168 on Biotech Values

[DewDiligence]

Re: Jason Kantor’s valuation:

>> I am trying to calculate an EPS of $1.36 and 32 P/E and a 30% discount and get the target sum $9.04. <<

mid_swe: You are correct: Jason Kantor’s calculation is screwed up. He claims to be using a 30% discount rate but is actually using a 20% rate:

$1.16x32x(0.80^7) = $9.13

In my opinion, 20% is too low a discount rate for GENR and hence Kantor’s target price using a discounted-cash-flow analysis should be lower than $9.

However, I am very sure that Kantor worked in the other direction; i.e. he decided on a target price of around $9 and he then established a 2011 EPS and a 2011 P/E to produce such a number. It’s total BS.

I am probably biased, but I prefer the kind of valuation analysis in #msg-1981262. I plan to update this at some point when I have enough time to do it right. Regards, Dew