What is ABD.L's Intrinsic value?

Aberdeen New Dawn Investment Trust PLC (ABD.L) Intrinsic Value Analysis

Executive Summary

As of June 19, 2025, Aberdeen New Dawn Investment Trust PLC's estimated intrinsic value ranges from $208.65 to $208.65 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $208.65 -7.7%

Is Aberdeen New Dawn Investment Trust PLC (ABD.L) undervalued or overvalued?

With the current market price at $226.00, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Aberdeen New Dawn Investment Trust PLC's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.83 0.93
Cost of equity 8.9% 11.5%
Cost of debt 4.0% 7.0%
Tax rate 1.2% 2.0%
Debt/Equity ratio 0.12 0.12
After-tax WACC 8.4% 11.0%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $23M
Discount Rate (WACC) 11.0% - 8.4%
Enterprise Value $211M - $276M
Net Debt $26M
Equity Value $184M - $249M
Outstanding Shares 1M
Fair Value $177 - $240
Selected Fair Value $208.65

Key Financial Metrics

Metric Value
Market Capitalization $235M
Enterprise Value $261M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 4.75
Current Dividend Yield 194.28%
Dividend Growth Rate (5Y) -1.57%
Debt-to-Equity Ratio 0.12

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Earnings Power Value 100% $20.86
Weighted Average 100% $208.65

Investment Conclusion

Based on our comprehensive valuation analysis, Aberdeen New Dawn Investment Trust PLC's weighted average intrinsic value is $208.65, which is approximately 7.7% below the current market price of $226.00.

Key investment considerations:

  • Strong projected earnings growth (120% to -2942% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.12)

Given these factors, we believe Aberdeen New Dawn Investment Trust PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.