I don't think one should add debt to the market price when evaluating Tricon.
As I pointed out in the article, they were loaded with debt
out of no fault of their own, i.e. operations did not get them
to this point. In fact, operations are extremely cash flow
positive, so factoring the debt into the valuation/total price
doesn't reflect the operations. 3-4 years from now, debt will
be largely paid off, and these are mature businesses that
are not likely to suddenly become cash flow negative.
Debt should not always be counted against a company, especially
when the debt doesn't reflect the quality of the operations.
I always endeavor to invest for the long-term. By looking
past the present, it allows me to see value where others don't.
If you don't agree with the article, that's your right. Julian
Robertson and UBS agree with me. DLJ agrees with you.
Good Investing,
Mike |
