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

To: E_K_S who wrote (46092)	1/4/2012 11:37:35 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78670

re Michelin I think your data is off. Looks for the metrics using ML.PA. My notes state ~20B Euro in revenues, 180M shares outstanding and ~ 10% operating margins. Earnings/share are expected to be 6.5-8Euro (wide range)> net assets/share were 47.9 Euro on 6/30/11 and should be somewhat higher now. I think I shoot for a price above 13$ to unload. Fundamentally Michelin is cheap, has a nice balance sheet with little debt and makes a big but reasonable bet that tire demand in the emerging markets will fuel their earnings going forward. The analyst projections assume flat earnings (within a wide range) for next year, which I think is reasonable. Falling rubber prices may provide some tailwind to margins, but the European tire market may have some headwinds. I don't think the Graham number is very useful, I can value a company either based on earnings power, or based on liquidation value but I don't see a blend of the two as useful. The Graham number seems to imply that the geometrical average of earnings power and book value scales with the value and I don't think this makes sense