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Netlink Trust
17-08-2019, 12:14 PM.
Post: #71
RE: Netlink Trust
(17-08-2019, 10:12 AM)weijian Wrote:
(15-08-2019, 08:57 PM)corydorus Wrote: If my math is right, using Reit Metric on gearing. Current I think is around 15%. Assuming div maintain, even after 10 years the gearing probably in mid 20%.

hi corydorus,
Since NLT pays out of FCF, part of the return is from "return of capital" and means the denominator (asset) will drop. Does your calculation account for that?

Currently their loan is low, so more borrowing will counts toward total asset iirc. This will help to cover theoretical depreciation of real assets. Their depreciation is very roughly 4x$40M annually. That's like 5% across 20 years.

(17-08-2019, 11:20 AM)BlackCat Wrote:
(15-08-2019, 08:57 PM)corydorus Wrote: If my math is right, using Reit Metric on gearing. Current I think is around 15%. Assuming div maintain, even after 10 years the gearing probably in mid 20%.

I think the real value of NLT's assets is based purely on the cashflows it generates.
Unlike properties, NLT's assets cannot be valued by comparison to similar transactions.  Could a bank repossess them?  They cannot even be sold! You would need govt permission.
So asset value is some meaningless accounting figure.  And gearing ratio is meaningless for NLT.  Interest coverage may be more appropriate.

I guess so. The question is sustainability. How long it is going to be.
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17-08-2019, 10:12 PM.
Post: #72
RE: Netlink Trust
(17-08-2019, 12:14 PM)corydorus Wrote: I guess so. The question is sustainability. How long it is going to be.

Yep, agree.  NLTs profits might end due to new technology or changing economics of the last mile connectivity.  But we don't have to know how long.  We just have to recognise the changes and sell before everyone else  Big Grin
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I wait until there is money lying in the corner, and all I have to do is go over there and pick it up.
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19-08-2019, 10:26 AM.
Post: #73
RE: Netlink Trust
(17-08-2019, 10:12 PM)BlackCat Wrote:
(17-08-2019, 12:14 PM)corydorus Wrote: I guess so. The question is sustainability. How long it is going to be.

Yep, agree.  NLTs profits might end due to new technology or changing economics of the last mile connectivity.  But we don't have to know how long.  We just have to recognise the changes and sell before everyone else  Big Grin

This is a common 'strategy,' where people think they can exit before others do. Obviously in practice, results will differ.

When it has become clear that the situation has turned negative, everyone will be rushing for the door at the same time. If one is early, it might only be a small loss, or lower profits. If one hesitates, and waits for further confirmation, the losses may by then be bigger.

I mean this in general, and not making a specific reference to NLT.

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