Talgo certainly has some technology in its favor, but companies like Alstom, Bombardier, and Siemens didn't build multibillion-dollar order books on the basis of blatantly inferior offerings.
I've tried to value Talgo on weight
scenario basis that incorporates high win-rate, low win-rate, and
moderate win-rate scenarios. Altogether, I come up with a fair value of
EUR 6.70 per share today, and most of my bearish scenarios produce fair
values in the EUR 3 to EUR 4 range, versus a current share price of EUR
4.50.
Readers should note that there is no ADR
available for Talgo, so any investors who wish to purchase these shares
will have to do so on the Madrid Stock Exchange (Bolsa de Madrid). Most
of the larger brokers can and will handle these trades, but investors
certainly need to ask themselves whether the added risk and hassle is
worth it.
Talgo's Rail Opportunity Looks Frustratingly Binary
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