Which companies have you found the most simple to value and that required the least assumptions? I note that in many PE and Renewable write-ups, you make assumptions about the values of the underlying assets, potential cash flows and power price forecasts.
However, it seems to me that the more assumptions you include, the more likelihood for error. Thanks in advance!
I suppose apart from Commodities where the only question is will it go up ordown, or a stock index (the same), probably the simplest businesses to understand are those which provide good levels of disclosure, those that don’t really change and don’t face disruption.
Ironically my perception is those are also the most difficult to find hidden value so mispricings tend to live in the unloved, or complex.
Ah yes. It makes sense that the easiest businesses to value would tend to rarely be undervalued - except in times of market panic where all stocks sell off.
I've noticed 2 stocks that look like they could be good value at this time. They are larger than the types you usually analyse, but the businesses seem pretty simple to understand when compared to private equity or renewable companies. I would appreciate your thoughts on these:
1) Greggs has had a significant pullback based upon more cautious forward guidance.
2) In Denmark we have Coloplast, which is looking pretty cheap and trading near its 2 year low. Healthcare is being affected by US Tariffs and Robert Kennedy being made health secretary. Nevertheless, they are a world leader in healthcare.... Make the simple stuff like bandages, stoma bags, syringes.
Profit margins are very good with them, and an aging population is good for the business
Coloplast sounds and looks like CTEC (Convatec), which I held some years back. Not sure that one is one for me.
But Greggs sounds like an interesting challenge. It’s well away from what I’m used to looking at but as you said it “should” be simple. The pullback makes it an interesting candidate for sure.
I think you've misunderstood the redemption mechanics. when they distribute e.g. 10% of NAV they also consolidate the shares, so the share count drops by 10% too, leaving the NAVps unchanged. today's news is good though, as converting assets to cash at book when you're on a -30% discount looks good to me!
It is based on the price vs the previous day auction.
See that's the thing Taff. It was 30p-36p yesterday same as today. Yet is "up".
Another general question for you:
Which companies have you found the most simple to value and that required the least assumptions? I note that in many PE and Renewable write-ups, you make assumptions about the values of the underlying assets, potential cash flows and power price forecasts.
However, it seems to me that the more assumptions you include, the more likelihood for error. Thanks in advance!
Great question.
I suppose apart from Commodities where the only question is will it go up ordown, or a stock index (the same), probably the simplest businesses to understand are those which provide good levels of disclosure, those that don’t really change and don’t face disruption.
Ironically my perception is those are also the most difficult to find hidden value so mispricings tend to live in the unloved, or complex.
OB
Ah yes. It makes sense that the easiest businesses to value would tend to rarely be undervalued - except in times of market panic where all stocks sell off.
Hi Mr. Oak Bloke.
I've noticed 2 stocks that look like they could be good value at this time. They are larger than the types you usually analyse, but the businesses seem pretty simple to understand when compared to private equity or renewable companies. I would appreciate your thoughts on these:
1) Greggs has had a significant pullback based upon more cautious forward guidance.
2) In Denmark we have Coloplast, which is looking pretty cheap and trading near its 2 year low. Healthcare is being affected by US Tariffs and Robert Kennedy being made health secretary. Nevertheless, they are a world leader in healthcare.... Make the simple stuff like bandages, stoma bags, syringes.
Profit margins are very good with them, and an aging population is good for the business
Coloplast sounds and looks like CTEC (Convatec), which I held some years back. Not sure that one is one for me.
But Greggs sounds like an interesting challenge. It’s well away from what I’m used to looking at but as you said it “should” be simple. The pullback makes it an interesting candidate for sure.
It’s on my list :)
OB
I think you've misunderstood the redemption mechanics. when they distribute e.g. 10% of NAV they also consolidate the shares, so the share count drops by 10% too, leaving the NAVps unchanged. today's news is good though, as converting assets to cash at book when you're on a -30% discount looks good to me!
Yes, it’s a partial compulsory redemption isn’t it. My bad!