One of the Buffet stock picking strategy is "Circle of Competence" - which is selecting a businesses that he can understand and analyze. TAXI is one example of stock that we can easily understand and analyze with relatively steady cash flow.
Owned by Rajawali group, the company provides taxi service in Indonesia especially in Jakarta, Depok, Tangerang, Bekasi, Surabaya, Semarang and Medan. It has regular taxi service, premium taxi services and also operates value added transportation business (VATB) through its subsidiaries and associated companies, which provides the limousine in Bali, Bandung, Lombok and Jakarta.
I established a projection in spreadsheet with assumption that TAXI could maintain its revenue growth at 50% in 2013 an 2014 as shown below :
Based on this projection, I derived the ideal price for Taxi at the end of 2013 and 2014 by multiplying its EPS with multiplier factor as shown here :
| P/E Ratio | 2014 | 2013 |
| 15 x | 1406 | 1205 |
| 20 x | 1875 | 1607 |
| 25 x | 2344 | 2009 |
Based on this projection, I believe the fair price of TAXI at the end of 2013 should be at 1200 - 1600 with 15x and 20x multiplier factor.
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