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Strategies & Market Trends : Buffettology

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To: Brendan O'Connor who wrote (2428)	4/11/2000 4:08:00 PM
From: James Clarke	Read Replies (1) of 4691

On looking harder at the proformas in the 8-K a few posts back, I fear we might have right business/wrong price, though maybe close enough to still be OK. I get 77 cents of earnings for the core business pro-forma FYE 9/99. Maybe you give that half a year's growth and put a 16 multiple on it and you get $13, plus the $5 of stocks they own in other companies gets me to about $18. I'll get more aggressive at that levle, though its probably no sin to pay 18-19 times earnings for this business. I think Brendan was doing an EBITDA multiple, no? Well, no, you did take out interest. But I didn't see you subtract either depreciation or capital expenditures, so its not really earnings and its not really free cash flow. I know, it sounds like I'm arguing with myself. Just want to make sure I've got it right and there's a lot of brainpower on this thread working to catch mistakes before they happen. Comments or other ways to analyze it?

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