thomast2

Huron Consulting: Getting Too Close to Its Roots

I have pointed out many weak spots from Huron’s latest financial results, such as immediate liquidity risk to cover their interest payment on their huge debt, the goodwill issue, the risk of equity holders being totally wiped out during a debt restructuring, etc. etc. At the same time, how much value it offers if the last 5 years’ financial reports are all fraud, which they are in the process of re-stating and re-issuing all of them? You can go back to read them all if you like, but do you know how much truth they said is really there? Can you tell the difference between the truth and the lies in those reports?

Obviously you think DCF, or more specifically the cash flow projection, is the only way to evaluate a company. Since you are a big fan of DCF, then tell me what do you think the discount rate (or hurdle rate) to use in this DCF model based on Huron’s management quality and their fraud financial reporting for the last 5 years? The weakest spot for Huron is its culture and management, or the so-called soft aspects of a company. Tell me how will you evaluate it based on DCF analysis?!

If you want this kind of analysis, fine, just go to buy UBS analyst report, which reiterate “Buy” rating when if it was traded at $45 and before it plummeted to $14, if that is the kind of DCF analysis and “serious” research report you want. Contrary to your view, I think SA and other websites provide their readers a platform of more diversified opinions about a firm, instead of a few mainstream Wall St. firm’s analysts only knowing how to grab numbers of cashflow and discount rates in the air and make up false assumptions in their DCF models. Those research reports along with their false DCF analysis are indeed worthless.

Huron Consulting: Getting Too Close to Its Roots

GMM: Please read the news again. This is directly from Reuters: "Huron's board audit committee discovered that shareholders of four businesses that Huron acquired between 2005 and 2007 redistributed portions of their acquisition-related payments among themselves and to certain Huron employees." Please note "to certain Huron employees". This is kickback to a few key own employees. Unless Huron Audit Committee is also wrong, then I really don't know what to say about Huron.

Also since this is the only comment you have made so far on SA, so I assume you register at SA just to make this comment to my article. In this sense, I am honored. Thanks.