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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (30485)	8/22/2010 12:20:21 PM
From: Spekulatius	Read Replies (1) of 78673

re BMW3.DE - Barrons had an article valuing GM at 4.5x EBITDA and calling it cheap. I don't think it is when premium car manufacturer which much less issues are trading at cheaper valuations. I took a look at BMW (BMW.DE 41.8 Euro/ BMW3.DE 29 Euro). There is a total of 656M shares outstanding. BMW made 1.27 Euro net earnings during Q2. Net debt for the industrial part (no counting the financing business) is about 3B Euro. Total market cap is ~ 27B Euro (amongst the 2 stock categories). They made 2.1B Euro EBITDA during the 2nd quarter alone, so annualized they trade for 3.4x EBITDA. Sales in Asia are up ~60% for 20% of the total. bmwgroup.com I do not understand how anybody would want to buy GM at 4.5x EBITDA with all it's issues (government, pensions) if you can buy a premium car manufacturer with very little debt, paying dividend that never showed a loss at 3.4x EBITDA.

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