Roger Montgomery provides a value investors view on the Dick Smith IPO. Under Anchorage Capital control, the business has boosted NPAT from $7m in 2013 (an abnormal year given heavy restructuring) to a forecast NPAT of $40m. This suggests to us that a proposed $520m market cap upon listing is not overly aggressive, and compares with the $420m valuation write-down. Assuming the $40m forecast NPAT is achieved by current management, this would mean a margin of 3.2% which compares to JB Hi Fi's (JBH) 2013 NPAT margin of 3.5%. Given this margin is in-line with industry best practice, it appears sustainable and not necessarily dressed up for sale. We are more comfortable with the business, its earnings and hence its upcoming IPO post our review. And this was only reinforced when we also met with management. (VIEW LINK)