«You have
historically high multiples of cash flows, low yields.
Besides your confidence in its talented CEO Mark Donegan, what in particular do you like about their business that gave you the confidence to pay
a historically high multiple?
As an example, it is the «safe», high - income Utilities sector that today sports
a historically high multiple, while the «risky» Technology sector has an earnings multiple below its long - term average.
Not exact matches
Put differently, as intuition would suggest, below median P / E
multiples typically lead to
higher average returns, while above median
multiples have
historically been associated with periods of below - average returns.
The STACK is a prolific hydrocarbon system with
high oil and liquids - rich natural gas content,
multiple horizontal target horizons, extensive production history and
historically high drilling success rates.
The S&P 500 registered a record
high after an advancing half - cycle since 2009 that is
historically long - in - the - tooth and already exceeds the valuation peaks set at every cyclical extreme in history but 2000 on the S&P 500 (across all stocks, current median price / earnings, price / revenue and enterprise value / EBITDA
multiples already exceed the 2000 extreme).
They research which campuses have the
highest percentage of students of color and speak to classes and student organizations about the benefits of TFA; they have visited more than 25
historically black colleges and universities (HBCUs) and
multiple colleges with large Latino student populations.
Because of
multiple payments for different loans, there has
historically been a
high default rate, as juggling
multiple loans gets tricky.
The portfolio manager looks for businesses with
historically high returns that are trading at cheap
multiples for the Fidelity Frontier Emerging Markets Fund, but he's also focused on companies that are funded by free cash, as opposed to debt.
The start of a contraction in valuation
multiples has
historically come long before
high levels of inflation.
If we assume that companies return their 7 % earnings and dividend yield (perhaps optimistic) and we also assume that
multiples don't expand further (because they're so
historically high) then 7 % is a safe starting point.
He cautioned, though, that during more active seasons the odds increase for hurricanes to make landfall in the U.S. «We know for the conditions that we expect this year,
historically there is a much
higher probability of
multiple hurricane strikes in the U.S.»