Anglo Platinum released a trading update here yesterday in the city of Gold

Anglo Platinum released a trading update here yesterday in the city of Gold and again guys, the market almost always gets it right. The stock was until yesterday trading on what looked like a lofty valuation, but we managed to work it all out quite quickly and said, spot on market. Apart from missing the 3.73 percent gain yesterday, you got it right "Mr. Market". I thought that a bit of simple math would prove my point, so here goes guys, the release, read it first:



"Anglo Platinum Limited hereby advises shareholders that basic earnings per share for the year ended 31 December 2010 are expected to increase to between 3,579 cents and 3,825 cents from the basic earnings per share of 1,234 cents for the year ended 31 December 2009 (restated from 1,269 cents)."



At the top end of the range then basic earnings are expected to be 3825 cents per share. Got that? This time last year it was 1234 cents for the full year. These are full year numbers. The first half last year on a similar basis Anglo Plats delivered 1228 cents per share worth of basic earnings per share. Minus 1228 from 3825 for the second half of the year and you get to 2597 cents worth of basic earnings for the second half of the year. Annualise that (expecting Amplats to do slightly better in this half) and you get to around 5200 cents worth of basic earnings per share for two halves, H2 2010 and H1 2011.



And at a current share price of 750 ZAR that puts the stock on a rolling earnings multiple of 14.4 times. Got that? Whereas the valuations looked ropey this time last year, the market gradually moved higher as the outlook for the auto market improved and the underlying commodity prices continued to power ahead. Because that is ultimately the driver of this story, the auto markets and stronger emissions controls of everything from diesel locomotives all the way through to the absolutely lazy leaf blower, which I hate so much. I am strictly in the perma-culture camp (thanks Dad) and encourage leaf coverage on flower beds.



But that is steering away from the two points that we are trying to make here, one the demand for the Amplats product should continue to improve, plus the market got it right with this one. I do expect in the coming days that the analyst models for the stock will change their twelve month price targets. And could just upgrade the stock, that is what I am thinking, I could be off mark here.