Sentences with phrase «on valuation multiples»

Why does the value investing community focus so heavily on valuation multiples (P / E, P / B, P / S, EV / EBIT, etc.)?

That implies some fairly steady downward pressure on valuation multiples.

But normalizing growth and inflation would also put pressure on valuation multiples to normalize, because current multiples rely almost entirely on a zero - interest rate world.

Not exact matches

Even though the correlation is strong, there are times when the total return on stocks has been positive, even as the valuation multiple declined.

But as BMO Capital Markets analyst Tim Casey recently pointed out, the industry still appears to be on death row because of the «gradual but unrelenting erosion of revenues, operating margins and valuation multiples.»

While valuation for all companies depends on growth and momentum, a Software as a Service business such as Salesforce or Workday typically also takes into account customer churn percentage and multiples of monthly recurring revenue (MRR).

«Mr. Wonderful» is notorious for taking a very pragmatic approach to valuation based on multiples, but each industry is different,» Ahmad says.

Using those multiples, you'd get a valuation, on the high end, of about $ 4.5 billion.

So we took a look at our data on private market valuation multiples to see how publicly - traded cloud storage and file - sharing company Box compares to still - private Dropbox.

The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity.

The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity.

These Fed - induced speculative valuations are now evident across the board, as the median price / revenue multiple on S&P 500 components (as well as S&P 1500 components) is now the highest in history, easily exceeding the 2000 peak.

The HFRI Relative Value (Total) Index is managed by maintaining positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities.

We track these and have found that for private company exits, we can find about 35 % with valuations for private companies (real or rumored) and make these available on our private company valuation multiple search tool.

With an emphasis on small investments in capital efficient businesses with low entry valuations and high ownership, small funds can produce attractive returns from more modest sub $ 110 million M&A exits and generate outsized returns from one or two «homerun» exits which can return multiples of the fund's total committed capital.

The valuation is based on the average price - to - book value multiple of three publicly traded peers: First Midwest Bancorp, MB Financial and UMB Financial.

It's important to emphasize that I don't view any of these groups as «undervalued» - even the largest stocks are above historical norms of valuation (with various individual exceptions), and even apparently «low» P / E multiples should be evaluated critically since they're on record earnings.

The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, expanding profit margins, good cash flow from operations and increase in stock price during the past year.

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

HFRI Relative Value Index maintains positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities.

Now trading on a price to earnings multiple of 16 times, Service Stream's valuation is beginning to factor in plenty of certainty at an uncertain time.

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).

After all, a moderate price / earnings multiple on elevated earnings does not imply moderate valuation.

«The later stages of the 2009 — 2017 bull market are a valuation illusion built on share buyback alchemy... The technique optically reduces the price - to - earnings multiple because the denominator doesn't adjust for the reduced share count... Share buybacks are a major contributor to the low volatility regime because a large price insensitive buyer is always ready to purchase the market on weakness... Share buybacks result in a lower volatility, lower liquidity, which in turn incentivizes more share buybacks, further incentivizing passive and systematic strategies that are short volatility in all their forms... Like a snake eating its own tail, the market can not rely on share buybacks indefinitely to nourish the illusion of growth.

Based on 20 years of global data and nearly 90 years of US data, the energy sector has never been cheaper on price - to - book multiples than it was at the end of 2015.1 The skeptics» response to these compelling headline valuations tends to be suspicion of book values, which indeed are likely overstated in some instances and vulnerable to further impairment.

«They are often looking to capitalize on building a brand capable of commanding the high valuation multiples that have dominated the industry over the past few years.

On valuations, it is important to note that the market entered February with multiples at multi-year highs.

Financial Statements Valuing a Company Based on Its Revenues The price - to - sales ratio is considered to be one of the ï ¿ 1/2 cleanestï ¿ 1/2 valuation multiples; it is also more tied to profit margin than you may realize.

As a side note, we're quite aware of the seemingly «reasonable» valuation of the market, on the basis of the forward operating earnings estimates of Wall Street analysts, at least on the basis of simplistic «price / forward earnings» multiples.

Intuitively, a valuation multiple of half the historical norm has the opposite impact on subsequent returns as a valuation multiple of twice the historical norm.]

After weeding out bad businesses the next needle (s) to pass is the parallel decision on if this good stock is also cheep judging from the absolute level of a number of valuation multiples and if the investor in the process of analyzing the qualities and inexpensiveness of the stock has been free from biases.

Rather than rely on past averages to forecast future returns, we use a building - block approach that adds current yield, likely long - term growth in income, and some mean reversion in valuation multiples to create forward - looking returns.

One way to project future expected returns, and to analyze past returns, is to separate them into a component that comes from growth in fundamentals and the component that comes from the change in the valuation multiple on those fundamentals.

I try to keep cash levels based on risks associated with the current absolute valuation multiples as well as my assessment of sustainability of current margins.

This valuation looks inexpensive on an absolute basis, and especially when we factor in the high earnings growth expectations: With a PE multiple of 15.6 and an expected EPS growth rate of 21 % Lowe's trades at a PEG ratio of just 0.74.

That contribution can vary, but on average, about 80 percent of the one - year price gain (or loss) is typically driven by rising (or falling) valuation multiples.

The speculative component rose above 100 percent during the 2008 - 2009 bear market, when the drop in valuation multiples made up the entire loss in share value, on average.

Research papers on valuation metrics: TEV to EBITDA Research and enterprise - multiple - vs - tobins - q

Now consider the growth stock: It actually ends up delivering a consistent 15 % annual gain in revenue & earnings — based on that performance, your fair value estimate rises accordingly & we can be pretty confident the market's happy to maintain or increase its valuation multiple.

Even if they did, and you value the company at an appropriate P / E and / or P / S multiple based on those metrics, I'd be hard pressed to come up with a valuation much higher than today's market price.

Let's split the difference, and base our valuation on an average / assumed operating margin of 19.8 % — which deserves at least a 1.75 Price / Sales multiple, in my opinion.

Value investors tend to focus far too much attention on this potential change in the valuation multiple, and often ignore what's otherwise a company that offers a poor return on capital.

They also performed a comparison with current valuations for a (select) group of public investment management firms — on average, the TAM transaction's valued at 75 % of the minimum multiple & just 49 % of the median multiple.

CRH's FY - 2015 EBIT margin was 5.6 %, which compares to a peak 9.9 % margin (back in 2007)-- so relying on the company's actual Op FCF margin (of 8.3 %) seems appropriate here for valuation purposes & deserves a 0.75 P / S multiple.

This neatly side - steps the issue of fair value altogether, which obviously helps avoid the temptation to exclusively focus on & assume a sudden step - up in a stock's valuation multiple.

On balance, a valuation based simply on current metrics seems neither too harsh nor too optimistic — there are still plenty of higher TV / radio M&A multiples to reference, but I think a 12 P / E and a 2.0 P / S ratio (based on a 21.8 % operating profit margin) are pretty neutral values to applOn balance, a valuation based simply on current metrics seems neither too harsh nor too optimistic — there are still plenty of higher TV / radio M&A multiples to reference, but I think a 12 P / E and a 2.0 P / S ratio (based on a 21.8 % operating profit margin) are pretty neutral values to applon current metrics seems neither too harsh nor too optimistic — there are still plenty of higher TV / radio M&A multiples to reference, but I think a 12 P / E and a 2.0 P / S ratio (based on a 21.8 % operating profit margin) are pretty neutral values to applon a 21.8 % operating profit margin) are pretty neutral values to apply.

In fact, the Monaghan stake is ultimately responsible for my valuation premium to Book: A 15 P / E multiple for this stake may seem aggressive, but it's on what looks like a temporary profit dip, and the implied valuation is undemanding considering their recent EUR 100 mio capex programme.

Its current property valuation & yield, occupancy rate, colossal 66 % discount to NAV, plus the presence of multiple activist investors on its board / register, all offer significant operational & share price upside potential.

Again, I'll split the difference (vs. a 30 % margin) & base my valuation on an average / assumed operating margin of 21.6 % — which I think now deserves a 2.0 P / S multiple.

As we demonstrate in the attached «DHT Peer Valuation», DHT's stock price is presently at a 75 % or greater discount to its value at its peers» average multiples of 2010 and 2011 EBITDA, i.e. an implied stock price of approximately $ 6.16 - $ 6.41 (versus $ 3.52 on 2/26/10) were it valued like its peers.