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Wealthcompound

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  • Alico: Getting Land On The Cheap [View article]
    I have not been following that closely but only the 51% share owned by Atlantic Blue was sold. Looks like a good deal from the buyer's side at first glance although I would have to analyze the deal further.
    Nov 8 11:35 AM | Likes Like |Link to Comment
  • Alico: Getting Land On The Cheap [View article]
    There is no need to look at EV when you examine the components of a business separately and determine sustainable debt levels. Also, EV is flawed in many ways. First, it takes the value of debt at market values instead of book values (debt holders have par claims, nothing more). Second, there is no accounting for valuable assets that are "hidden" on the balance sheet. Third, it is more useful in comparing companies with differing capital structures in the same industry as part of a ratio (EV/Cash Flow for example). Finally, since EV uses market cap for the equation, what if the market cap is wrong? However, ALCO has an EV of approximately $200 million, which is still much less than the land alone is worth, which begs the question, do you really think that you could purchase ALCO as a whole for $200 million dollars? If you use EV/acres, that is approximately $1,500 per acre. The board would laugh in your face. In addition, the value has to be realized? If you buy an apartment building for 50% of its value, you must then sell it so you can "realize" the value? That is a ludicrous notion, especially when it produces a return. The value is what you get when you purchase the asset.
    Dec 15 03:07 PM | Likes Like |Link to Comment
  • Alico: Getting Land On The Cheap [View article]
    I doubt any CEO is as interested in my welfare (or yours) as he is his own. So why invest in any public company if that is the case?
    Dec 15 01:36 PM | Likes Like |Link to Comment
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