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  • Crosstex Energy, Inc.- Attractive Risk To Reward Ratio Of 5 (X) [View article]
    you were projecting 2014 DPS at XTXI of $1.21. Post-merger with DVN Midstream they guided towards 2014E DPS of approx. $0.80, including $45m of synergies. This DPS will grow at 20% thereafter. (pag 19 of merger presentation). How do you reconcile the difference with your projections?
    Oct 25 03:55 PM | Likes Like |Link to Comment
  • Maxygen: A Free Option If Ever There Was One [View article]
    Well undoubtedly there is an option, but it doesn't look free, when the stock is trading above the lower end, you consider the time value of money while you wait for the final dissolution and you bear the risk of additional contingent liabilities.

    There must be better places out there to park your money, no?
    Jul 11 12:08 AM | 2 Likes Like |Link to Comment
  • Maxygen: A Free Option If Ever There Was One [View article]
    The Barda application has been a failure.
    Amgen will keep filibustering for years in court.
    The sale process of G-34 has failed, hence Jim Sulat departure.

    Your call option has <1% chance to be in the money
    Jul 10 08:41 PM | 1 Like Like |Link to Comment
  • Analyzing Companies Is A Complex Affair: Don't Use EBITDA [View article]
    Great theoretical discussion. Most of the positions expressed here are unfounded though, including the author’s. This is why:

    1) We all know that value today is just the PV of future after tax cash from now to the future
    2) Having FCF per se means nothing. A firm can have negative FCF and yet explode in valuation as long as its huge capex today is lower than the PV of all its future cash inflows; or a firm can have very large cash flows and yet be worth very little because it does not have a large and profitable investment opportunity set, and is therefore slowly self-liquidating
    3) Multiples are not the cause but just the effect of value; multiples are only useful to summarize and compare value, and only in slow moving situations
    4) Saying that EV to FCF is better than EV EBITDA or that a business is valued by the market based on PE or EV/Sales or something else is malarkey… all metrics are price-dependent and can all be reconciled based on mathematical relationships
    Oct 20 03:35 AM | 1 Like Like |Link to Comment