Not exact matches
That
assumes continued share buybacks, funded from an estimated operating
cash flow of over $ 25 billion a year
by 2018.
So, if we
assume that the room for capital appreciation is low, then it looks like I made a very inefficient investment
by choosing capital appreciation vs
cash flow.
As a bonus, you could have extended the balance transfer card
by going into another promotional after 36 months, keeping lower monthly payments,
assuming you need more
cash flow.
In such cases, I calculate after minority adjustements for any positive
cash flow line (operating etc.)» but
assume the debt and interest expense etc. has to be borne
by the ultimate shareholder.
Assuming a base case of about $ 5.5 billion in free
cash flow and 3 % annual growth, Home Depot stands to reward shareholders with roughly 8.5 % returns in the long haul — not outstanding
by any measure, but its results are likely more reliable than your average ticker symbol.
Right now, for valuation purposes, let's bridge the gap
by assuming ESCH can re-attain half those margins — and I mean on a
cash flow basis — which deserves a 1.5 Price / Sales multiple.
By investing in real estate, the risk you
assume is minimized with tangible assets that don't significantly change in value over short periods of time not to mention real estate generates steady monthly
cash flow each month for the duration of the investment.
Typically, when analyzing a property, investors
assume an exit capitalization rate that is higher than the entry cap rate
by 0.5 - 1 percentage points to account for the uncertainty of future
cash flows expected to be received
by the property under consideration over the holding period.