Graham Osborn Posted July 5, 2016 Share Posted July 5, 2016 Hi folks, this is just the start of a valuation I am running but looking for some feedback. GRA spun off GCP earlier this year. I am trying to understand why although the TTM sales of GRA/ GCP are roughly comparable, the market appears to value GRA at around 4x the EV of GCP. The answer may be in the margins but even then it seems like a big divide. I've attached a preliminary valuation not incorporating margins. Any help appreciated. The stock has perhaps some historical interest here on COBAF as it was a Ted Weschler success story prior to his joining Berkshire: http://www.bloomberg.com/news/articles/2012-10-22/weschler-rise-from-grace-leads-to-role-advising-buffett I am evaluating the stock as a potential short candidate.20160705_GRA_valuation_sketch_no_margins.docx Link to comment Share on other sites More sharing options...
Graham Osborn Posted July 6, 2016 Author Share Posted July 6, 2016 I ran an operating margin comparison today (see updated file). GRA's margins are a bit higher in the low 20s vs high teens for GCP.20160705_GRA_valuation_sketch_WITH_margins.docx Link to comment Share on other sites More sharing options...
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