Great video! I found it very informative, and thought the transitions and text looked good! All around great work on this and I can’t wait to see you keep improving!
Thanks for the video! These are things I usually ignore in valuation, but would be interested in knowing what do you recommend one pay attention to regarding impairment when analyzing stocks? Perhaps Goodwill as a % of equity or assets? Would be grateful for any ideas, thanks!
Glad you enjoyed the video Goran. Personally, I don't look into goodwill on its own and focus solely on the cash flow. If an acquisition isn't performing well, that is already reflected in the revenue/margins, and subsequently in the cash flow. On the other side, if an impairment relates to a new acquisition and this is a new information for me, I'll adjust my assumptions related to the revenue growth / margins arising from that acquisition. Based on many studies, acquisitions and mergers tend to destroy value (on average). Often times, the reasons are: - Overestimating synergies - Paying too high of a price For this reason, I try to avoid companies that have poor track record with acquisitions and aim to grow primarily by acquiring other companies. I hope this helps!
Great video! I found it very informative, and thought the transitions and text looked good! All around great work on this and I can’t wait to see you keep improving!
Thank you for the feedback, much appreciated! A lot of work to be done to improve my video editing skills :)
Thanks for the video!
These are things I usually ignore in valuation, but would be interested in knowing what do you recommend one pay attention to regarding impairment when analyzing stocks? Perhaps Goodwill as a % of equity or assets?
Would be grateful for any ideas, thanks!
Glad you enjoyed the video Goran.
Personally, I don't look into goodwill on its own and focus solely on the cash flow.
If an acquisition isn't performing well, that is already reflected in the revenue/margins, and subsequently in the cash flow. On the other side, if an impairment relates to a new acquisition and this is a new information for me, I'll adjust my assumptions related to the revenue growth / margins arising from that acquisition.
Based on many studies, acquisitions and mergers tend to destroy value (on average). Often times, the reasons are:
- Overestimating synergies
- Paying too high of a price
For this reason, I try to avoid companies that have poor track record with acquisitions and aim to grow primarily by acquiring other companies.
I hope this helps!
Thanks @@kostadin_ristovski!