Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: RockyBalboa who wrote (11005)	7/18/1999 3:16:00 PM
From: Q.	Read Replies (3) of 18998

re. valuation for UAI, you did a valuation based on earnings before depreciation and amortization, which is a sort of cashflow. I tried this and came up with a number different from yours. In the last quarter they had EBDA of $2.0 M. Annualizing that, gives a runrate of $8 M, or $0.33 per share. Peer insurance companies have a multiple of about 23 X cashflow, yahoo.marketguide.com which in the case of UAI would put the value at $7.54. So I came up with a higher valuation than yours, based on cashflow. (Maybe the discrepancy is that you used trailing twelve months and I used an annualized run rate based on the most recent Q?) Of course my valuation based on book was a lot lower. That valuation was less than 3.80. And all these valuations are way below Friday's stock price of 27. One thing that is clear to me, the financial statements for this insurance co. don't look anything like those of its peers. The peers have balance sheets dominated by good assets like bonds, and they have deprectiation/amortization that are very small compared to earnings. Not like this company.

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