"It is not about waiting for better times, it is about waiting for the market to realize the company's equity is worth multiple times its current price."
So by "company's equity" I assume you're referring to the Book Value per share of the company being higher than its current price ?
But "Book Value" is much the same as the Liquidated Value of a company and the only time that a shareholder would get a benefit from the company's final Net Assets is when those Assets are distributed after the company folds. And even then, how does one know if the shareholders will actually get what the Assets show on the Balance Sheet ?
But I thought that you were into this company for the Long Haul ? So being around when the company is liquidated isn't in your game plan ?
" Again, this company is not losing money"
I'm not so sure about that. It appears that TLRD lost -$89.6mil. in its 3Q 2020 .....
"Given that live in the Netherlands ... "
Irrespective of where one lives, one is not currently scoring by holding stock in a company that is performing poorly and its price is generally declining. At the very least one can procure a capital gain in other instruments, i.e. bonds, etc, providing a guaranteed return.
" ... to get the large upside you have to be early, pay as little as possible, and hope for the best."
Really ? .... So if you got in Really Early into TLRD, say, in Jan. 2019 when their price was falling, and paid about $20/share, you would have been -75% down at $5/share prior to the market collapse .....
On the other hand, if you bought into a quality company, such as MCO, in Jan. 2019 for $150/share, you would be +80% up at 270/share at the same time ....
At the end of the day I'd say that a lot depends on how one analyzes the financial quality of a company and its overall business performance.
It's all very well to refer to possible future events such as ...
"The thesis is that this will happen by the company executing its plans for accelerated debt reduction using their strong FCF generation as well as substantial share repurchases"
..... which may, or may not, happen as planned in the future according to the "thesis". And if it doesn't, then what ? You sit with shares going nowhere.
IMO, one is far more likely to obtain a Capital Gain from MCO than from TLRD based on MCO's financial quality and above average business performance.
But if the time did come when TLRD started to show an ongoing upward price move, there would be nothing stopping you from selling your MCO shares, at a healthy profit, and using the proceeds to buy into TLRD.
Enjoy your Week !
-bruwin- |
