R.C.,
I respect your opinion, but I think it does matter
(to look at other related companies). When you
analyze any business, whether it's a valuation
analysis or an analysis of its business model,
you must look at how other similar companies are
judged by the market.
It's only natural for people to wonder why the
market value one company at a certain price, but
an almost identical company at another price. The
comparison between AMZN and BPG is not a close one,
since the part of BGP's business that is similar to
AMZN's core business makes up a very small part of
BGP's overall business. However that part is
expected to grow. How much and how fast is what
people wonder.
However, BGP and BKS are very similar and I'll
make that case to you shortly, yet their valuations
are very far apart. Sure, BKS went to the
Internet before BGP, but not that far ahead
of BGP and both are playing catchup to AMZN in
that part of their business.
Even with the announcement by BKS recently, it's
still worth almost twice as much as BGP. Here
are the numbers:
BKS BGP
--------------------------------------
Revenues $2984.00 Million $2508.40 Million
Net Income $ 56.30 Million $ 84.30 Million
EPS $ .81 $ 1.04
Curr. Assets $1206.10 Million $1239.80 Million
Curr. Liab $ 805.90 Million $1144.90 Million
LT Debt $ 447.90 Million $ 6.00 Million
Shares Out 68.62 Million 77.10 Million
Profit Margin 1.9 % 3.4 %
ROE 10.6 % 13.5 %
ROA 3.0 % 4.6 %
PE 44.1 14.8
BookValue/Share $ 7.77 $ 8.12
I'm a very aggressive investor, but I look at
the fundamentals as well and these numbers are
for the trailing 12 months. I highlighted the
ones I think are important. Surely you agree
that these two companies are very similar in
many many ways, yet the valuations are extremely
different.
Ultimately, even if two companies are alike,
one can BECOME worth less (and even worthless
if given enough time) under bad management.
Mr. Pfeffer admitted his mistakes and everybody
makes mistakes (God created us didn't he? :) ).
Anyways, I don't think he (Mr. Pfeffer) wants
to run BGP into the ground. Give the guy
a chance.
So why do I and other people compare BGP to
other companies? Just to see if we can figure
the reason for the disparity if any and maybe
even figure why BGP is valued the way it is.
Some comparisons are better than others, and
sometimes we're just jealous of people making
money while we're not. Hey, sh*t happens.
But that's the truth.
I hope this answers your questions. |
