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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (11940)	1/23/2001 5:58:40 AM
From: valueminded	Read Replies (1) \| Respond to of 78634

TimBa I think you miss the whole point of Enterprise Value discussion, the issue is Enterprise Value Ratio. Which means if you pay off your debt, your ratio will go down and if you have a small market cap, your ratio will go down. And smaller ratios are better The EVR = EV/EBITDA. It is commonly used in buyout scenarios as it is far less limited than PE by including the debt side of the equation. The actual enterprise value (or present purchase price of the corporation)is of great benefit and I usually replace market cap with EV when I do ratio analyis. For example, price to sales ratio doesnt mean anything to me if the company is saddled by a debt which dwarfs its market cap. (typical of many car companies in particular) In terms of car companies, I think Daimler has its hands full. The projections I read are that car sales will be declining for the next couple years - hardly a prescription for increasing values in the lot. I think they kind of bounce around for a while and maybe go lower here. Additionally, Last time I checked, there are more interesting companies which have EVR's in the 3 range (or less) - some of which may not have as many warts as daimler. jmho.