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.
While it's true that the market established even deeper
valuation troughs in 1974 and 1982 (near 7
times prior peak earnings, compared with the current
multiple of about 11), it is important to remember that long - term Treasury yields were 8 % in 1974, and 14 % in 1982, compared with about 4 % at present.
The green, orange, yellow, and red lines represent the projected total returns for the S&P 500 assuming terminal
valuation multiples of 20, 14 (average), 11 (median) and 7
times normalized earnings.
The first was that I was buying inferior businesses due to what I perceived at the
time to be a low
multiple (but alas not a low
valuation).
Specifically, shares of Best Buy are now trading at a mid-teens
multiple while the EBITDA
valuation has gone from a trough of four
times to now seven
times.
Though it's impossible to say where the
multiple will be at any given
time —
valuations are more volatile than trend earnings — 16.5 is an ordinary market
multiple (i.e. roughly fair value for the S&P 500).
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.
For clarity, we are seeing that revenue
multiples, defined as a company's yearend implied company
valuation divided by its yearend revenues, have declined during the 2012 - 2014
time frame.
Ferragamo May Seek Higher IPO Rating Than Prada (Bloomberg)» [Salvatore Ferragamo] may seek a higher
valuation multiple than its bigger rival Prada SpA... [the company] may be valued at as much as 2.25 billion euros ($ 3.2 billion), or 26
times estimated 2012 profit.»
For above - average volatility (the two bottom plots) the typical
valuation multiples are between about 10
times and 15
times the 10 - year average of trailing real earnings.
Standard Total Return approaches receive a boost during
times of low
valuations as
multiples expand.
Given that the lower of these
valuation multiples is almost 25
times more expensive than the average Euclidean holding, it is no surprise that we have missed these recent gains.
Given Visteon's
multiple internal and external catalyst's, highly attractive absolute
valuation and the outsized spread between the company's «when issued» shares and the already depressed
valuation's of its global competitors, we think that the stars are aligning for bargain hunting investors to generate spectacular returns of 30 % + in a short period of
time with relatively low risk.
Put another way, using the reciprocal of these numbers, growth has commanded anywhere from a lofty 12
times to a mere 3
times the
valuation multiple of value.
I found this projection interesting and set out to examine how realistic it is, given what we know at this point in
time, by decomposing total stock returns to its components, namely dividend yield, inflation, real earnings growth and change in the
valuation multiple.
Absolute
Valuation: Let's play find the smallest number... At the current EUR 0.084 share price, Zamano trades on a 0.5 P / S
multiple (despite a 13.9 % operating margin), 4.8
times net income, 4.1
times adjusted net income, 3.6
times free cash flow & just 3.2
times EBITDA.
It might be foolish setting this price target, because the outcome's probably binary... Once they're comfortable with an investment thesis, plus a
valuation multiple / range, investors are loathe to change their minds... so if necessary, companies often have the
time / space to grow into any
valuation eventually.
However, with Welltower trading near all -
time highs and many bond - like stocks trading at premium
valuation multiples relative to history, short - term, more risk averse investors need to keep in mind the risk of a short to medium - term correction if rates do begin to rise and cause capital outflows for bond - like stocks.
Given the company's diverse business lines, projected better environment for financials over the next twelve months and low
valuations the market
multiple could easily improve to a conservative 12
times forward earnings.
That is particularly true between a «disciplined» appraisal method such as X
times rent, and a more «subjective»
valuation based on how «hot» an area is, and how many people want to live there, which might bring about a
multiple, Y, higher than X (the general
multiple) for just one area.
At 13
times forward earnings, Apple already suffers from the lowest relative
valuations within the cohort, and is even lower than the greater S&P 500's
multiple of 17
times, so any
multiple expansion would be welcomed.
The company's core products includes Home
Valuation landing pages, which combines
multiple automated home
valuations with visualizations of real -
time buyer intent, its Buyer MatchTM dashboard, which intelligently pairs homebuyers and sellers within a brokerage, and its Real -
time Buyside Market Analysis (BMA), which arms a brokerage's agents with insights on buyer demand to help them close more listing presentations.
CPD 101: Business Enterprise
Valuation CPD 102:
Valuation of Property Impairments and Contamination CPD 103: Agricultural
Valuation CPD 104: Hotel
Valuation CPD 105: Highest and Best Use Analysis CPD 106: Multi-Family Property
Valuation CPD 107: Office Property
Valuation CPD 108: Seniors Facilities
Valuation CPD 109: Lease Analysis CPD 110: Creative Critical Thinking: Advancing Appraisal to Strategic Advising CPD 111: Decision Analysis: Making Better Real Property Decisions CPD 112: Real Estate Consulting: Forecasting CPD 113: Request for Proposals (RFPs) CPD 114:
Valuation for Financial Reporting - Real Property Appraisal and IFRS CPD 115: Appraisal Review CPD 116: Land
Valuation CPD 117: Exposure & Marketing
Time:
Valuation Impacts CPD 118: Machinery and Equipment
Valuation CPD 119: Urban Infrastructure Policies CPD 120: Urban Infrastructure Applications CPD 121: Submerged Land
Valuation CPD 122: Expropriation
Valuation CPD 123: Adjustment Support in the Direct Comparison Approach CPD 124: Residential Appraisal: Challenges and Opportunities CPD 125: Green Value — Valuing Sustainable Commercial Buildings CPD 126: Getting to Green — Energy Efficient and Sustainable Housing CPD 127: More Than Just Assessment Appeals — The Business of Property Tax Consulting CPD 128: Retail Property
Valuation CPD 129: Industrial Property
Valuation CPD 130: Residential
Valuation Basics CPD 131: Commercial
Valuation Basics CPD 132: More than Just Form - Filling: Creating Professional Residential Appraisal Reports CPD 133: Valuing Residential Condominiums CPD 134: Rural and Remote Property
Valuation CPD 135: Buy Smart: Commercial Property Acquisition CPD 136: Waterfront Residential Property
Valuation (Coming soon: 2018) CPD 140: Statistics 101: Math Literacy for Real Estate Professionals CPD 141: Exploratory Data Analysis: Next Generation Appraisal Techniques CPD 142: Introduction to
Multiple Regression Analysis in Real Estate CPD 143: Appraisal
Valuation Models CPD 144: Geographic Information Systems and Real Estate CPD 145: Introduction to Reserve Fund Planning CPD 150: Real Property Law Basics CPD 151: Real Estate Finance Basics CPD 152: Financial Analysis with Excel CPD 153: Entrepreneurship and Small Business Development CPD 154: Business Strategy: Managing a Profitable Real Estate Business CPD 156: Organizing and Financing a Real Estate Business CPD 155: Succession Planning for Real Estate Professionals CPD 157: Accounting and Taxation Considerations for a Real Estate Business CPD 158: Marketing and Technology Considerations for a Real Estate Business CPD 159: Human Resources Management Considerations in Real Estate (Coming Soon: 2018) CPD 160: Law and Ethical Considerations in Real Estate Business (Coming Soon: 2018) CPD 891: Fundamentals of Reserve Fund Planning CPD 899: Reserve Fund Planning Guided Case Study