Palantir Posted September 28, 2012 Share Posted September 28, 2012 Does anyone think this stock is highly overvalued? It's one thing for a firm with high growth to be trading at this valuation, but given its sizable debt load and low growth...isn't this a bit much? I'm not shorting it right away, but I think it's a candidate for study for a potential short... Link to comment Share on other sites More sharing options...
gfp Posted September 28, 2012 Share Posted September 28, 2012 Strong, irreplaceable, global beverage brands in a consolidating industry. Pricing power. No controlling shareholder... These things tend to trade at 20-25 times earnings. Brown Forman trades in that range also, but without the debt (and with a controlling family). I would think there are much more attractive shorts in businesses that are dying and mispriced, rather than potentially slightly mispriced great businesses. Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted September 28, 2012 Share Posted September 28, 2012 one of the last companies I would look to short. for one, the leverage is fine. It's simply taking advantage of historic low interest rates. that's smart. two, the business is one of the more stable and predictable businesses around. It generates a lot of free cash flow. These are qualities that make it the best kind of business to put some debt on. Three, it's a real candidate to be acquired. It's not too big. It has attractive brands. And it isn't family controlled. Sure it might be ahead of itself. But shorting? Look for frauds or bad over leveraged businesses. this is not that. Link to comment Share on other sites More sharing options...
Ross812 Posted September 28, 2012 Share Posted September 28, 2012 Don't touch it! Last time I 'studied' BEAM I woke up in a bathtub ;) . I've had BF.A on my watch list for a long time and used to own Diego. I think the spirits industry may be a little overvalued as a whole, but BEAM doesn't really stand out from it's peers. Link to comment Share on other sites More sharing options...
Palantir Posted September 28, 2012 Author Share Posted September 28, 2012 Thanks for the very decisive responses lol. I'll definitely stay away from this bad boy. I'm just getting started on studying how to develop shorts...way harder than finding longs! Link to comment Share on other sites More sharing options...
gfp Posted September 28, 2012 Share Posted September 28, 2012 try looking at overvalued dogs like this guy - http://www.bloomberg.com/quote/BV:US Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted September 28, 2012 Share Posted September 28, 2012 try looking at overvalued dogs like this guy - http://www.bloomberg.com/quote/BV:US wow what's the story here? they haven't made a dime in 4 years and they have a $1b market cap. and what's with that awful name? is short interest high here? another one, although it's come down is OCZ. would not be surprised to see it selling for pennies someday. Link to comment Share on other sites More sharing options...
gfp Posted September 28, 2012 Share Posted September 28, 2012 Short interest has been rising. I learned about BazaarVoice from moore-capital on the Zynga thread and it captured my interest. Fascinating to me! http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/zynga-s1-thoughts/ Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now