Seeking Alpha


View as an RSS Feed
View Valuecruncher's Comments BY TICKER:
Latest  |  Highest rated
  • Evaluating Coca-Cola with Relative Valuation [View article]
    If you are interested - we have some interactive valuation tools that cover KO.

    We have both comparator tools and a DCF tool.
    Aug 12, 2009. 04:47 AM | Likes Like |Link to Comment
  • GM: Delaying the Inevitable [View article]
    @Homer II
    Sorry, when I submitted the story there was a link to this story on Clusterstock:

    The original title of the post was General Motors (GM) Runway: 350 Days. The point was that based on GM's performance in the last quarter they will struggle to survive another year. This back of the envelope calculation and the illustration of revenue, operating and share price performance was to highlight the poor performance of the company for an extended period of time. Based on the historic performance of the company it is difficult (in my opinion) to see GM turning things around irrespective of any restructuring or assistance.

    Outlining GM's problems, actions and resolutions is not a trivial exercise and could easily be extended to a thesis. That was not the purpose of the post. I am sorry you didn't get anything out of the post and despite your suggestion I will not be putting my "pen" down.
    Nov 13, 2008. 06:12 AM | Likes Like |Link to Comment
  • What's the Intrinsic Value of Verizon? [View article]
    That is a completely fair call.

    And why we make the model interactive.
    Oct 30, 2008. 05:33 PM | Likes Like |Link to Comment
  • Walmart Stock Price Looks Slightly Expensive [View article]
    Change the terminal growth number if you think it is wrong - you can do that with the model.
    Oct 6, 2008. 06:20 PM | Likes Like |Link to Comment
  • Running the Numbers: IBM is Cheap [View article]
    EBITDA is a measure of profitability that we use as an estimate for cash generated by the business (then adjusted for Capital Expenditure, Depreciation and Tax to calculate free cash flow in the Valuecruncher model).

    Reuters provides a EBITD margin for companies - our base case are a reasonable estimate. Below is the Reuters link for IBM:
    Oct 1, 2008. 01:53 AM | Likes Like |Link to Comment
  • Running The Numbers: Amazon Looks Expensive [View article]
    @ Andrew Krainin

    I would dispute that 5% terminal growth is comparable to a large industrial.

    You would expect an approximate 3% long-term growth rate for an economy like the US. Above that starts to become a material number in a DCF calculation.
    Sep 27, 2008. 05:30 AM | Likes Like |Link to Comment
  • Running The Numbers: Amazon Looks Expensive [View article]
    $AMZN grew revenues from $6.9bn in 2004 to $14.8bn in 2007 - a 29% CAGR in that period. Our analysis has the same growth moving forward - growth in the core business and other opportunities (i.e. Web Services). $30.5bn in 2010 is a 28% CAGR from 2007 to 2010.

    Our analysis suggests $AMZN is overvalued at current share prices. Even with significant revenue growth projections and a 5% terminal growth rate. Even assuming these growth rates are achieved - the stock looks expensive.
    Sep 27, 2008. 01:32 AM | Likes Like |Link to Comment
  • Running The Numbers – Apple Looks Cheap [View article]
    @ Murphy

    What a brilliant call. I love it.

    I may need to get t-shirts printed...

    Sep 23, 2008. 04:08 PM | Likes Like |Link to Comment
  • Running the Numbers: A Five-Minute Valuation of Microsoft [View article]
    It is a current valuation - today.

    If you want to change any of the inputs - for example WACC - you can.
    A DCF valuation simply requires estimates of cash flow and a discount rate.

    The Valuecruncher model does calculate a net debt figure - so it does look at the cash (and any debt) on a balance sheet.
    Sep 19, 2008. 03:46 PM | Likes Like |Link to Comment
  • How to Get Apple to $200 [View article]

    We are are valuing the cash the cash generates - that is what a DCF calculation does. The cash on the balance sheet is used to generate revenues and profits into the future - which is what we are valuing. Here is our take on valuation:

    @Scott Parker

    As I said - we did value the cash on hand. I agree that modeling innovation is hard. But we think it is worth making an attempt - by looking at the potential cash flows innovation can deliver. Potentially with different scenarios factored in.


    Completely agree that innovation is not predictable. We are big fans of the book - The Black Swan. But from a valuation perspective - we are trying to put some numbers around that process to value companies like AAPL. Perfect - no. Worth trying - we think so.
    Jun 6, 2008. 04:36 PM | Likes Like |Link to Comment
  • How to Get Apple to $200 [View article]
    Thanks everyone for the comments. A couple of quick responses.

    At Valuecruncher we use a discounted cash flow model (DCF). We are trying to assess the cash a business will produce into the future in determining a valuation today. We have put some assumptions into our analysis - our interactive tools allow you to adjust these assumptions if you disagree. You can then save and share these results. We are aiming to move valuation debate to what we consider fundamental corporate finance. We love the passion of Apple fans.


    I did not state it but our model does factor in the balance sheet - including the US$19.5 billion cash and cash equivalents. We have that $22 a share of cash factored in.


    Our model limits the tax rate to the corporate rate in the country of domicile. We don't let people put in crazy numbers. We might down the track however.


    Our view is that the growth rate will likely drop after 2009/10. We may be wrong with our curve - play with our assumptions. Give us your take.


    Those are target valuations. Ours is based on what we think the valuation should be today. Ours is an opinion - you can play with the assumptions.


    I think that is a good way of thinking about AAPL. That said value still comes down to the cash that a business will generate into the future (in corporate finance anyway).




    We disagree - we think it can be modelled. But that is just us.

    Thank you again everyone for the comments.

    Jun 6, 2008. 06:43 AM | Likes Like |Link to Comment
  • Amazon Appears Reasonably Priced [View article]
    Hi hugoh,
    You are correct that the valuation is highly dependent on the assumptions made. This is the subjective nature of valuation in general. Our valuation highlight's the aggressive growth forecasts and provides sensitivity analysis to illustrate the impact of alternative assumptions.
    Thanks for the feedback.
    Mar 4, 2008. 12:58 PM | Likes Like |Link to Comment
  • What's Driving Amazon's Stock Price? [View article]
    From a Business Week article in November 2006

    By all accounts, Amazon's new businesses bring in a minuscule amount of revenue. Although its direct cost of providing them appears relatively low because the hardware and software are in place, Stifel Nicolaus & Co. (SF) analyst Scott W. Devitt notes: "There's not going to be any economic return from any of these projects for the foreseeable future." Bezos himself admits as much. But with several years of heavy spending already, he's making this a priority for the long haul. "We think it's going to be a very meaningful business for us one day," he says. "What we've historically seen is that the seeds we plant can take anywhere from three, five, seven years."
    Jun 11, 2007. 12:30 AM | Likes Like |Link to Comment
  • What's Driving Amazon's Stock Price? [View article]
    Valuecruncher recognises that Amazon has a number of growth options but we did not explicitly identify each one in our post. The web services component of Amazon is an interesting play and has potential but from a valuation perspective it is not significant enough today to justify the difference between our mid-point valuation and the current Amazon price.
    Jun 7, 2007. 05:46 PM | Likes Like |Link to Comment