Analyst: Softbank is Net's hidden gem
cbs.marketwatch.com
Lehman Brothers analyst Ravi Sarathy follows Internet and communications stocks across Asia. After five months of dissecting Softbank's business, he and his team launched coverage on June 4 with their top "buy-1" recommendation of "the hidden gem" of the global Internet sector in an exhaustive195-page report.
Softbank was 14,560 yen ($120) a share on June 1. You put a "buy" on the stock three days later, with a target of 41,600 yen a share. Today, June 18, it broke 20,000 yen, up about 50 percent. From here it doubles?
Sarathy: If you look at the published research on Softbank to date, it begins and ends with one level of analysis -- which is taking the stakes that SB has in its most famous, publicly listed Internet companies, add them together, net out the debt and, voila, you have a value per share of about where the stock price was before breaking 20,000 yen today. But what that approach fails to capture, in our view, is about 65 percent of the value of the company coming from two things: the 150 investments the company has in Internet companies in addition to Yahoo, E-Trade and MessageMedia (MESG), and equally important is how Softbank binds these investments together cohesively. Again it creates synergies and additional value through further effective allocation of capital.
|
