SATS

[CityFarmer]

If we were to put both tables side-by-side, we'd now be better able to appreciate this Warren Buffett quote,

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”

[Image: SATS-SummaryEarnings_zps1ad02ac6.jpg][Image: SATS+Summary+earnings.JPG]

Left : Courtesy of 'lonewolf'
Right : Courtesy of 'Dividend Warrior'

When I first saw DW's table, the immediate giveaway that something wasn't right was the high yield of >6% (also the PE).... I doubt there're any blue chips now at >6% yield, even after the recent pull-back in prices....

Perhaps it'd be good if DW explains what he's trying to achieve by posting that outdated table and the one-liner 'Strong balance sheet.....' ?? Looks very misleading to me...

A honor mistake? or probably just another sloppy post due to whatever valid reason(s)?

It shows that buddies here have low tolerance on sloppy post, and a good sign for a high quality forum IMO.

[yeokiwi]

It shows that buddies here have low tolerance on sloppy post, and a good sign for a high quality forum IMO. Big Grin

Maybe my memory is failing, but there are more quantitative analysis of stocks by forum members in Wallstraits and Afralug days and the members used to tear apart the company P/L, balance sheet and cashflow statement in a healthy discussion.

Nowsaday, these analyses are getting less.

[weijian]

Maybe my memory is failing, but there are more quantitative analysis of stocks by forum members in Wallstraits and Afralug days and the members used to tear apart the company P/L, balance sheet and cashflow statement in a healthy discussion.

Nowsaday, these analyses are getting less.

I was NOT from the pre-VB days. Nonetheless, i can imagine that in the current VB forum, there are more instances of

(1) Huat ah! (when market is rising), GSS is coming! (when market is dropping)
(2) i just entered/sold XXXXX at X.XX price (end with a smiling face)
(3) There is strong support/resistance at X.XX price level.

Maybe the good old days are indeed better for the fundamental investor. On the other hand, looking at the bright side, i see that these comments do play a part for the value investor to understand more about the mood of the market.

[finnfinn]

as stated i would rather use free cash flow, but using EBITDA is valuing the cash the business generates regardless of replacement. perhaps replacement problems will surfaced later on but purly from valuation what is acceptable for PE, EV/EBITDA and P/Free Cash flow will be rather different.

i am just stating because thats what is shown on the "balance sheet"

I think the equation are like this:

Free Cash Flow= Cash Flow from Operation - CAPEX
Cash Flow from Operation= EBITDA + Working Capital Changes
EBITDA= measures operating Cash Flows without working capital changes.

I think no one ratio is definite. If an industry is CAPEX intensive, then FCF is appropriate but if an industry is not CAPEX intensive, then my preference is EBITDA.. just my 2 cents worth...and welcome any comments.

[pianist]

so which is more desirable when wanting to strip SATS and have a good look?

[Drizzt]

as stated i would rather use free cash flow, but using EBITDA is valuing the cash the business generates regardless of replacement. perhaps replacement problems will surfaced later on but purly from valuation what is acceptable for PE, EV/EBITDA and P/Free Cash flow will be rather different.

i am just stating because thats what is shown on the "balance sheet"

I think the equation are like this:

Free Cash Flow= Cash Flow from Operation - CAPEX
Cash Flow from Operation= EBITDA + Working Capital Changes
EBITDA= measures operating Cash Flows without working capital changes.

I think no one ratio is definite. If an industry is CAPEX intensive, then FCF is appropriate but if an industry is not CAPEX intensive, then my preference is EBITDA.. just my 2 cents worth...and welcome any comments.

Hi there, i seldom find an industry that do not need replacement.In any case I usually value it based on that the business will run on perpetually.

However EV/EBITDA is a really fast way to screen to identify if at this current point, sans the replacement, the assets are undervalued.

if you hit an EV/EBITDA of 4 or less, than you look further.

hope this is sensible and conservative.

[finnfinn]

so which is more desirable when wanting to strip SATS and have a good look?

I prefer EBITDA, purely because it is recurring and more stable, FCF can be fluctuating due to CAPEX component + working capital changes.

---

as stated i would rather use free cash flow, but using EBITDA is valuing the cash the business generates regardless of replacement. perhaps replacement problems will surfaced later on but purly from valuation what is acceptable for PE, EV/EBITDA and P/Free Cash flow will be rather different.

i am just stating because thats what is shown on the "balance sheet"

I think the equation are like this:

Free Cash Flow= Cash Flow from Operation - CAPEX
Cash Flow from Operation= EBITDA + Working Capital Changes
EBITDA= measures operating Cash Flows without working capital changes.

I think no one ratio is definite. If an industry is CAPEX intensive, then FCF is appropriate but if an industry is not CAPEX intensive, then my preference is EBITDA.. just my 2 cents worth...and welcome any comments.

Hi there, i seldom find an industry that do not need replacement.In any case I usually value it based on that the business will run on perpetually.

However EV/EBITDA is a really fast way to screen to identify if at this current point, sans the replacement, the assets are undervalued.

if you hit an EV/EBITDA of 4 or less, than you look further.

hope this is sensible and conservative.

Hello,


I think banks/insurance/finance companies may be one of the industry that are not so CAPEX intensive..

Interesting point on EV/EBITDA of 4 or less, any reasons behind the number?

[lonewolf]

Perhaps it'd be good if DW explains what he's trying to achieve by posting that outdated table and the one-liner 'Strong balance sheet.....' ?? Looks very misleading to me...

Personally I dun think that DW was trying to mislead anyone. Let's just say that he is more used to the 'HWZ' style of posting where he is active and posts dun get scrutinized as much.

I reminded me when he first joined VB that 'HWZ' style posting are usually not welcome. And unless he has something more substantial to contribute, then perhaps its better not to post at all.

So maybe chalked it down to rookie mistake?

[Drizzt]

so which is more desirable when wanting to strip SATS and have a good look?

I prefer EBITDA, purely because it is recurring and more stable, FCF can be fluctuating due to CAPEX component + working capital changes.

---

as stated i would rather use free cash flow, but using EBITDA is valuing the cash the business generates regardless of replacement. perhaps replacement problems will surfaced later on but purly from valuation what is acceptable for PE, EV/EBITDA and P/Free Cash flow will be rather different.

i am just stating because thats what is shown on the "balance sheet"

I think the equation are like this:

Free Cash Flow= Cash Flow from Operation - CAPEX
Cash Flow from Operation= EBITDA + Working Capital Changes
EBITDA= measures operating Cash Flows without working capital changes.

I think no one ratio is definite. If an industry is CAPEX intensive, then FCF is appropriate but if an industry is not CAPEX intensive, then my preference is EBITDA.. just my 2 cents worth...and welcome any comments.

Hi there, i seldom find an industry that do not need replacement.In any case I usually value it based on that the business will run on perpetually.

However EV/EBITDA is a really fast way to screen to identify if at this current point, sans the replacement, the assets are undervalued.

if you hit an EV/EBITDA of 4 or less, than you look further.

hope this is sensible and conservative.

Hello,


I think banks/insurance/finance companies may be one of the industry that are not so CAPEX intensive..

Interesting point on EV/EBITDA of 4 or less, any reasons behind the number?

nope just stating some examples.

[Temperament]

O. K.
Will buy SAT now?