like you, I am revisiting this as i owned it a few years ago. I dont quite understand your Intrinsic Valuation. I have very similar revenue, Ebit, capex numbers but very different outcome. My DCF says its worth £185 using a 10.5% WACC, with terminal (2012) revenues 103m, Ebitda 23.7m, capex 4.1m therefore FCF pre interested 15.3m. My 10yr DCF value is £100m inc the £10m cash therefore terminal (11yr+) is £73m
Hey there, if you have similar revenue, ebit, capex, wacc, etc, it doesn't make sense to have such a large difference in the outcome. In theory, if you have a FCF of 10m/year, and you have a WACC of 10.5%, the only explanation for coming up with such a high valuation is to have a high implied revenue growth in year 10. So, either there is something going wrong in your model or you have a much higher multiple in year 10 (through high expected revenue growth).
A commoditized player in a slow-growing cyclical industry tied to the credit cycle and facing a ton of competition. It's pretty much exactly the opposite of the type of company I like.
@@kostadin_ristovski it's just the broker that I use. It does not give me access to international markets. If there are no ADRs, then it's out of reach for me. I don't feel like opening another account.
It reminded me a bit of my investment in Simpson Manufacturing. I did extremely well in SSD. I just doubled my investment a couple weeks before year end. I have since sold half of my position. The run up was probably a bit too quick. I am having trouble finding something interesting at the moment. I have some cash in money markets because of that. Waiting for an interesting investment.
I have an eye on Fortinet, but I don't like the current price. 2023 was phenomenal for me. Makes me a bit doubtful I can achieve the same gains in 2024. In almost 4 years, I have an annualized return of about 20% and I have no doubts it's not my expertise. I have been extremely lucky with some of my investments. But luck eventually runs out.
About 60% of my combined portfolios is in small caps. I think that's where most of the opportunities are. I have made more money with some small caps than with Google that I bought at $85 in 2022.
The goal of the video is not to convince you to invest. Other than that, fundamentally, your approach is wrong. If you judge a company based on the share price, I doubt it will lead to a performance that beats the market. In the long run, the share price reflects the fundamentals of the business. If the earnings grow, and the dividend grows, the price will follow.
@@kostadin_ristovski i agree with that on a fundemental lvl. But here in europe companies are under valued for decades. If a mature company like this one hasnt ever traded around its fairvalue i dont see why that would change in the future
I disagree that in Europe companies have been undervalued for decades. In fact, I'll argue that many of the large companies are overvalued. As for this particular company, I think not only it was around its fair value, but it was also overvalued back in 2015. Somehow, companies whose share price already went up get more attention, than the ones whose share price is flat and might be a better deal. Investing is fun and this is only to show the behavioral part that plays a big role!
Interesting company but they never realy recovered from the 2008/09 crisis. Another crisis like that and you wont see your money for the next 15 years. But then you can pick them up for -90% the current price.
I love these type of videos
Damn, so not boring enough?
like you, I am revisiting this as i owned it a few years ago. I dont quite understand your Intrinsic Valuation. I have very similar revenue, Ebit, capex numbers but very different outcome. My DCF says its worth £185 using a 10.5% WACC, with terminal (2012) revenues 103m, Ebitda 23.7m, capex 4.1m therefore FCF pre interested 15.3m. My 10yr DCF value is £100m inc the £10m cash therefore terminal (11yr+) is £73m
Hey there, if you have similar revenue, ebit, capex, wacc, etc, it doesn't make sense to have such a large difference in the outcome.
In theory, if you have a FCF of 10m/year, and you have a WACC of 10.5%, the only explanation for coming up with such a high valuation is to have a high implied revenue growth in year 10. So, either there is something going wrong in your model or you have a much higher multiple in year 10 (through high expected revenue growth).
@@kostadin_ristovski my terminal growth is 3%. It’s the same model I have used for decades as a hedge fund manager
A commoditized player in a slow-growing cyclical industry tied to the credit cycle and facing a ton of competition.
It's pretty much exactly the opposite of the type of company I like.
I personally don’t share that view, but I encourage disagreement. Thank you for sharing your thoughts!
this is the type of company i like. Unfortunately it's in the UK, otherwise i would take a look at it myself.
I'm tempted to buy shares. Let's see what the New Year brings Joel! Would you mind sharing why the "unfortunately" part?
@@kostadin_ristovski it's just the broker that I use. It does not give me access to international markets. If there are no ADRs, then it's out of reach for me. I don't feel like opening another account.
It reminded me a bit of my investment in Simpson Manufacturing. I did extremely well in SSD. I just doubled my investment a couple weeks before year end. I have since sold half of my position. The run up was probably a bit too quick. I am having trouble finding something interesting at the moment. I have some cash in money markets because of that. Waiting for an interesting investment.
I have an eye on Fortinet, but I don't like the current price. 2023 was phenomenal for me. Makes me a bit doubtful I can achieve the same gains in 2024. In almost 4 years, I have an annualized return of about 20% and I have no doubts it's not my expertise. I have been extremely lucky with some of my investments. But luck eventually runs out.
About 60% of my combined portfolios is in small caps. I think that's where most of the opportunities are. I have made more money with some small caps than with Google that I bought at $85 in 2022.
the share price is going nowhere. dunno why i would want to invest in it. Even with divs included they are hardly keeping up with inflation.
The goal of the video is not to convince you to invest. Other than that, fundamentally, your approach is wrong. If you judge a company based on the share price, I doubt it will lead to a performance that beats the market.
In the long run, the share price reflects the fundamentals of the business. If the earnings grow, and the dividend grows, the price will follow.
@@kostadin_ristovski i agree with that on a fundemental lvl. But here in europe companies are under valued for decades. If a mature company like this one hasnt ever traded around its fairvalue i dont see why that would change in the future
I disagree that in Europe companies have been undervalued for decades. In fact, I'll argue that many of the large companies are overvalued.
As for this particular company, I think not only it was around its fair value, but it was also overvalued back in 2015.
Somehow, companies whose share price already went up get more attention, than the ones whose share price is flat and might be a better deal. Investing is fun and this is only to show the behavioral part that plays a big role!
Interesting company but they never realy recovered from the 2008/09 crisis. Another crisis like that and you wont see your money for the next 15 years. But then you can pick them up for -90% the current price.
The company is definitely not riskless.