@mantri – great work. we learn from each other. Find attached something I read recently – read through the entire blog slowly – its quite a revelation.
sort of reminds one of the Yudhishtra’s ashwathama story. there is often a lot of feedback that I get that the company is exporting and I can see the data and hence cash must be real. This a fallacious argument – yes, the company could be exporting and generating cash – BUT, that does not mean that it is generating as much cash as it is showing. You need another data point to figure that out. That’s why it’s called triangulation – you need three independent data points.
Also, your valuation is not a function of sales, profits or EBITDA margins – its a function of free cash flows. That’s something that gets forgotten in pursuit of growth sometimes.
For the record, valeant is a company that has been in the centre of a controversy much like herbalife – no one knows what’s the truth but if you follow the arguments you get to learn a lot.
Trying to put in a case study soon.
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