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Pim Keulen  

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  • Altice: Raising Stakes With A Highly Leveraged Balance Sheet [View article]
    Hi LenR4, I agree that EBITDA is the metric to judge these companies. However, it may be nice if Altice (and others) earns a buck or two on the bottom line as well.
    Apr 8, 2015. 06:09 AM | Likes Like |Link to Comment
  • Garmin rallies on RBC upgrade [View news story]
    Sounds like an evident move to me :-):

    http://seekingalpha.co...
    Jan 27, 2015. 05:15 AM | Likes Like |Link to Comment
  • Garmin: Strong Fitness Momentum Supports $67 Price Target [View article]
    Nice to see RBC raising its price target to $67/share as well:

    http://seekingalpha.co...
    Jan 27, 2015. 05:14 AM | Likes Like |Link to Comment
  • IBM: Attractive Entry Point Despite Weak Earnings And Guidance [View article]
    Don't agree with you on this one, because both interest expenses and all (future) repayments will not flow to shareholders, but to bank, bond holders etc. In my opinion, net debt should be subtracted from PV.
    Jan 21, 2015. 05:24 PM | Likes Like |Link to Comment
  • Foot Locker: Goldman Sachs' Downgrade Makes Perfect Sense [View article]
    Perhaps only for advice on basketball shoes (like runnersworld etc.)?
    Jan 20, 2015. 03:35 AM | Likes Like |Link to Comment
  • Foot Locker: Goldman Sachs' Downgrade Makes Perfect Sense [View article]
    Hi Edward,

    You mention a 9.5% growth rate. Is that Cash Flow (from operations) or Free Cash Flow growth rate? Makes a big difference, namely capital expenditure is a cash outflow as well in these models.

    Further, my model shows a value of $49.50 per share with growth rate of 9.5% over the next five years instead of 7.5%. So, even in your scenario, FL is undervalued (all other variables constant).

    Pim
    Jan 19, 2015. 10:21 AM | Likes Like |Link to Comment
  • Netflix: A Streaming Buy With 55% Upside [View article]
    My problem with these valuation models is that a large portion of the outcome relates to the terminal period. This is much more uncertain. I prefer a distribution close to 50/50 between forcast period and terminal period. Further, I miss capital expenditure in your valuation. You now assume investments to be equal to annual depreciation, I have trouble believing this is the case for a high growth company like Netflix.
    Jan 18, 2015. 01:58 PM | 1 Like Like |Link to Comment
  • Garmin: Strong Fitness Momentum Supports $67 Price Target [View article]
    Thanks Edelstijn.You're correct. However, Fitness has a much higher margin than Automotive. Further, Garmin has a strong foothold in Marine, Aviation and Outdoors (unlike TomTom). I prefer Garmin because of its profitability, something TomTom has not really proven yet.

    I agree Telematics will become very important for TomTom though and could be very profitable as well.
    Jan 14, 2015. 08:34 AM | Likes Like |Link to Comment
  • Garmin: Strong Fitness Momentum Supports $67 Price Target [View article]
    Thanks Edelstijn.You're correct. However, Fitness has a much higher margin than Automotive. Further, Garmin has a strong foothold in Marine, Aviation and Outdoors (unlike TomTom). I prefer Garmin because of its profitability, something TomTom has not really proven yet.

    I agree Telematics will become very important for TomTom though and could be very profitable as well.
    Jan 14, 2015. 08:33 AM | Likes Like |Link to Comment
  • Coca-Cola Outlook For 2015 [View article]
    Hannes,

    Very solid article and valuation model. You did not explicitly include a company risk premium in your calculations. What is your thought regarding an additional risk premium for specific company risks (because you'll buy just Coke and not a well spread portfolio that yield 5.9% on average)?
    If any, I would say the additional premium should only be 1 to 2% or so (Coke remains a stable company). Still, this could seriously lower the outcome of the model.
    Jan 6, 2015. 06:09 PM | 1 Like Like |Link to Comment
  • Don't Get Fooled By This DCF Valuation: Nike Is Overvalued, Not Undervalued [View article]
    Thanks Owen. Interesting point to say the least.

    I understand your argument and agree with it from a DCF perspective. However, we do not live in a perfect world. Strong brand names are less likely to 'fail' investors as their basic earnings are strong due to stable sales etc. Therefore, the risk of failure is less than less stable companies.

    On the other, I do admit that the low risk investment is represented in the low discount rate of 8% already.
    Jan 6, 2015. 05:46 PM | 1 Like Like |Link to Comment
  • Don't Get Fooled By This DCF Valuation: Nike Is Overvalued, Not Undervalued [View article]
    Thanks for your additional information Keubiko. Personally, I prefer a longer forecast period (with higher growth rates) combined with a 1% TV growth rate.

    Btw, a 2% terminal growth rate results in a valuation of $64 to $67.5 (considering the same 5% safety margin). No that much of a difference. However, the percentage of Terminal Value in the total Equity Value rises. In that case, I prefer a higher margin of safety.

    What's your thought on the margin of safety in relation to terminal growth rate and safety margin?
    Jan 6, 2015. 05:39 PM | Likes Like |Link to Comment
  • Don't Get Fooled By This DCF Valuation: Nike Is Overvalued, Not Undervalued [View article]
    Thanks Mitchell, I definitely agree with you that any DCF valcultation is nog black and white.
    However, the outcomes differ that much that one cannot say both are accurate. The problem is with the low spread between discount rate and terminal growth rate (3% is way too high). Therefore almost all value is generated in future cash flows. This makes the model less accurate.
    Regarding the discount rate, the market risk premium should be considered somewhere between 5.5% and 6%. There are several academic studies to refer to. I feel comfortable with a 5.9% market risk premium though.
    Jan 6, 2015. 01:16 AM | 1 Like Like |Link to Comment
  • Don't Get Fooled By This DCF Valuation: Nike Is Overvalued, Not Undervalued [View article]
    Thanks for your comment. True, I used a different approach and compared Nike with Under Armour. From this perspective, Nike's valuation could be considered as attractive (compared to Under Armour, not on a stand alone basis).

    "Nike's first quarter earnings and full-year guidance support my prior conclusion that Nike has a more attractive valuation than Under Armour"

    So, if investors were to choose between Nike, Under Armour and Adidas, I would suggest Nike is the best pick. However, it seems to be an expensive one from a DCF perspective.
    Jan 6, 2015. 01:12 AM | 1 Like Like |Link to Comment
  • Under Armour: Signing Murray Is Not Likely To Have A Significant Impact [View article]
    ILEX, I share your concern regarding the fit between UA and Tennis. Seems more an opportunistic deal. Especially, because Murray's own clothing line and shoes are not ready yet (seasons is about to start).
    Jan 2, 2015. 05:38 AM | Likes Like |Link to Comment
COMMENTS STATS
184 Comments
87 Likes