Wednesday, April 22nd, 2009
Update: these links are currently down. We hope to have them back up as soon as possible.
NZX is the New Zealand stock exchan
ge
. Today NZX placed links to Valuecruncher valuations for the NZX 50 on their website NZX.com.
NZX Summary Page For Telecom New Zealand ($TEL.NZ)
At Valuecruncher we believe research is important for retail investors participating in equity markets. Retail investors are looking for recommendations and guidance in making investments. Valuecruncher is very pleased to be making our interactive analyst reports available to a wider audience through our partnership with NZX.
Tags: NZX, Valuecruncher
Posted in NZX, Valuecruncher | No Comments »
Tuesday, April 21st, 2009
Next week Valuecruncher will be at the FinovateStartup09 event in San Francisco. Valuecruncher is one of the participating companies. V
aluecruncher is excited to be part of the event.
Mark Clare from Valuecruncher will be in the Bay Area the week of 27 April to 1 May. He is then going to be in LA (4-5 May) and New York (6-8 May) the following week.
Mark can be contacted at mark.clare@valuecruncher.com.
Tags: Valuecruncher
Posted in Valuecruncher | No Comments »
Tuesday, April 21st, 2009
10 days ago we made the argument that the withdrawl of the IBM ($IBM) acquistion offer for Sun ($JAVA) was a problem for $JAVA shareholders. The heading for the post was “Sun ($JAVA) needs IBM ($IBM)“. The basis of our analysis was that the IBM acquisition offer looked much better than Sun as a standalone business.
It looks like we were half right – the important half. Today Oracle ($ORCL) announced the acquisition of Sun ($JAVA) at US$9.50 a share – just above the revised $IBM offer of US$9.40 a share. Sun did not need IBM because of Oracle. The logic of being acquired in the board price range was still compelling.
$JAVA has found an acquirer and this still looks a higher value option for $JAVA shareholders than remaining an independent company. This is a good result for $JAVA shareholders.
Disclosure: None
Tags: IBM, JAVA, ORCL
Posted in IBM, Oracle, Sun Microsystems | No Comments »
Saturday, April 11th, 2009
Last weekend IBM ($IBM) withdrew their acquisition offer for Sun Microsystems ($JAVA). Pre-offer $JAVA generic viagra
AQ:JAVA”>had not traded over US$6.00 since October last year. The original $IBM offer was at US$9.55 (subsequently dropped to US$9.40). With this offer $IBM was valuing $JAVA not as a standalone business – but as part of a combined entity. The premium to the pre-offer share price represented the synergies $IBM believed they could achieve with the acquisition (additional revenues opportunities – but more likely expense savings). These synergies are what allowed $IBM to make the offer they did. Upon announcement of the offer the $JAVA shares traded as high as US$9.27. With the withdrawal of the offer the shares fell back to close at $6.56 on 6 April – now US$6.68. So what does a valuation of $JAVA as a standalone business look like? This is the way to examine $JAVA – to compare with a US$9.40 offer from $IBM.
Valuecruncher Interactive Analyst Report For $JAVA – New Format
Valuecruncher produces a valuation of US$6.44 for $JAVA. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 3.6% below the current share price of US$6.68. It is 31.5% below the US$9.40 $IBM offer.
Assumptions
- Revenue: Reuters aggregates 15 analysts covering $JAVA and the mean estimates of 2009 and 2010 revenues are US$12.4 billion and US$12.2 billion respectively. For our analysis we have used US$12.4 billion in 2009, US$12.2 billion in 2010 and US$12.0 billion in 2011.
- Profitability: We have used an EBITDA margin of 4.5% in 2009 rising to 5.5% in 2010 and beyond. Reuters has $JAVA‘s EBITD margin at -7.5% last year and an average of 5.5% over the last five-years.
- Capital Expenditure: We have assumed capital expenditures of US$550.0 million in 2009 then US$450.0 million per annum moving forward.
- Discount Rate: 10.0%.
- Terminal Growth Rate: 3.0%.
Our analysis incorporates the cash and debt on the $JAVA balance sheet – Valuecruncher calculates a net debt number.
Based on our numbers – the $IBM offer looks very attractive for $JAVA shareholders. Play with our assumptions – what does your analysis say? Our model is interactive – you can change any of our assumptions.
Disclosure: None
