FTS international

[donmihaihai]

How does a co. With free cash flow higher than market cap(fy19 > 120) and net profit (fy18 258) produce a bv of 38?

[port]

headwinds-

1.https://www.worldoil.com/news/2019/10/30/idled-frac-fleets-sold-for-scrap-amid-shale-drilling-slump

2. investor lawsuit
https://www.courthousenews.com/fracking-...ss-claims/

3.intention of major shareholders to sell 70m of shares
https://seekingalpha.com/news/3517388-ft..._4m-shares

[port]

EV/ (EBITDA - CAPEX)=5x

Liquidating Value Per Share= $(negative)2.3

If you have $50 mm in equity and $500 mm in debt then a rise in value to $600 mm will double your equity
and a drop in value to $450 mm will wipe you out. If it is worth $700 mm you will quadruple your money.

[port]

Power law investing
https://www2.deloitte.com/content/dam/De...esting.pdf

The distribution of price changes follows a power law in which the probability of a gradually larger move falls off much more slowly than in the normal distribution. As a result, a disproportional part of the expected payoff is concentrated in a very limited number of outcomes.

[port]

Cash Return on Capital Invested (CROCI) is defined as the ratio of Adjusted EBITDA to Gross Capital Invested (Total Assets Plus Accumulated Depreciation Less Non‐Interest Bearing Current Liabilities).

CROCI=124.6/(639.3+90-85.2)
= 19%> cost of capital of abt 8%

24% S&P 500 ‐ 7 Year avg from 2012-2018
Compounding Share Value by reinvesting cash flow at high rates of return

[weijian]

Hi all,
Thread has been renamed and relocated to its appropriate location.

Moderator

[port]

Principles for thought:-

Principle of Least Effort: When seeking information, effort declines as soon as the minimum acceptable result is reached.

Nonlinearity: Outputs aren’t always proportional to inputs, so the world is a barrage of massive wins and horrible losses that surprise people.

Knightian Uncertainty: Risk that can’t be measured; admitting that you don’t know what you don’t know.

Ostrich Effect: Avoiding negative information that might challenge views that you desperately want to be right.

Backfiring Effect: A supercharged version of confirmation bias where being presented with evidence that goes against your beliefs makes you double down on your initial beliefs because you feel you’re being attacked.

Feedback Loops: Falling stock prices scare people, which cause them to sell, which makes prices fall, which scares more people, which causes more people to sell, and so on. Works both ways.

False Uniqueness Effect: Assuming your skills are unique when they’re not. Comes from conflating “I’m good at this” with “Others are bad at this.”

McNamara Fallacy: A belief that rational decisions can be made with quantitative measures alone, when in fact the things you can’t measure are often the most consequential. Named after Defense Secretary McNamara, who tried to quantify every aspect of the Vietnam War.

Pareto Principle: The majority of outcomes are driven by a minority of events.

[port]

FTS closed at 0.41 usd on 10mar.

I sold off FTS at >1USD, a bagger for me which I attribute to dumb luck instead of skill.

[CY09]

Personally I don't think it was entirely dumb luck, in Feb 2020, there were a couple of analysts who had a positive spin about FTS in their analyst report. This helped to boost the share price on the news that FTS was turning around.

https://seekingalpha.com/news/3542336-ft...quote_news