This week we want to try something new. We want to put some analysis in your hands this week. We are going to try a new feature on the blog - “Stock Of The Week“.

This is how it will work. We are going to identify a stock on Monday (today), provide some information around that stock (but not a valuation) and ask the readers of this blog to complete valuations of the company (using the Valuecruncher valuation tool). On Friday we will look at all the valuations completed for the company and provide our take on the valuation of the company.

Remember - you can be completely anonymous with the analysis. We won’t be making fun of any valuations - we want to hear what people think. We are keen to tap the wisdom of the crowd.

If you are looking for a quick tutorial on how to complete a valuation - here is an example using Microsoft.

Stock Of The Week

We have decided to start with a New Zealand stock this week. Rakon ($RAK.NZ) is a New Zealand-based designer and manufacturer of high-performance frequency control technology. Valuecruncher completed a valuation of the company at the end of October.

Since we completed our valuation the stock has dropped 39% on the back of rough financial results and guidance on future potential financial performance. We thought it was time to get some thoughts from you on what could happen next - and what that means for valuation.

Resources To Assist

Our valuation from the end of October is a good starting point. It gives a view of $RAK.NZ using information from analysts at that time. It is a solid starting point for inputs like discount rates, terminal growth rates and tax. Since that valuation $RAK.NZ has released information about their last six-months of performance and expectations moving forward. This presentation (especially slide 3) gives a good summary of where the company is at today. Some of this information could certainly feed into a new valuation. Finally here is the media take on the $RAK result.

So what do you think? Does the current share price of NZ$1.11 mean the shares look overvalued, undervalued or about right? Complete a valuation - and write some comments on your assumptions. At the end of this week we will review the view of the crowd and add our take.

As always the starting point is the $RAK.NZ company page - Here.

Tags: NZX, RAK

This entry was posted on Monday, November 17th, 2008 at 10:50 am and is filed under NZX, Rakon. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.