ASA
ASA Gold and Precious Metals Limited
$50.11
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 78.6% below fair value
You pay
$50.11
Bear
$214.89
Fair
$234.17
Bull
$234.17
Bear
$214.89
+328.8%
ROTCE 20.0% → 3.67x TBV
Fair
$234.17
+367.3%
ROTCE 25.0% → 4.00x TBV
Bull
$234.17
+367.3%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (60.4%) vs. cost of equity (8.4%)
Implied Market Multiple
0.86x
Summary
With ROTCE of 60.4% vs. 8.4% cost of equity, fair P/TBV is 4.00x on $58.54 tangible book, implying $234.17 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly