original mungerville Posted August 27, 2015 Share Posted August 27, 2015 Picasso, Short it based on AZ's analysis. Be my guest and best of luck because you are going to need it! Link to comment Share on other sites More sharing options...
writser Posted August 27, 2015 Share Posted August 27, 2015 No AZ (or are you John Hempton?... John Hempton and Roddy Boyd linking to this shit...reference the Queen, "bid" us goodbye at the end... doesn't really fuckin' matter does it AZ), its not "fine", your IRRs are not "fine" you dumb shit. Nobody, I MEAN NOBODY, does an IRR calculation for a business and in year 10 essentially assumes it goes bankrupt. What the FUCK man? Do you think we are stupid? Just how stupid do you think we are? You trying to scare people again? You see, I know YOU aren't stupid, and because those IRR calculations and arguments are a complete joke, well you are worse than stupid, your are dishonest. If you start swearing when somebody has a different opinion about a stock you own you should probably scale down your position. Posts like this are a disgrace to this forum. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 No AZ (or are you John Hempton?... John Hempton and Roddy Boyd linking to this shit...reference the Queen, "bid" us goodbye at the end... doesn't really fuckin' matter does it AZ), its not "fine", your IRRs are not "fine" you dumb shit. Nobody, I MEAN NOBODY, does an IRR calculation for a business and in year 10 essentially assumes it goes bankrupt. What the FUCK man? Do you think we are stupid? Just how stupid do you think we are? You trying to scare people again? You see, I know YOU aren't stupid, and because those IRR calculations and arguments are a complete joke, well you are worse than stupid, your are dishonest. If you start swearing when somebody has a different opinion about a stock you own you should probably scale down your position. Posts like this are a disgrace to this forum. Thanks, but I just modified my post because it wasn't appropriate. But man, are you kidding me? He is assuming the business goes bankrupt in year 10 to calculate his IRR? I mean this is TOTALLY misleading... Link to comment Share on other sites More sharing options...
Picasso Posted August 27, 2015 Share Posted August 27, 2015 You realize that you'll be crucified by Valeant bulls? Good luck No, we only crucify comments which are not substantiated by analysis. Just wanted to re-quote this comment from Mr. Upset himself. ::) Link to comment Share on other sites More sharing options...
Picasso Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 It seems like the asset transfer is making it difficult to reconcile the post merger cash generated since close in the Valeant power point. Maybe we can just take a look at 2010 CF from ops: http://www.nasdaqomxbaltic.com/upload/reports/san/2011_q4_en_ltl_con_ias.pdf Cash from Operation in 2010 was 63M LTL. In Q3 2012 USD (2.75 LTL : USD) this is $22.9M. Valeant uses 5 Qs of from Q3 11 to Q3 12. So lets give them a 5.7M bump to compare AZ values Q3'11 to Q3'12 CF from Ops of 14.8M to the 2010 CF from ops + an extra normalized quarter of ~$28.6M. Bagehot says IR directs investors to use EBITA when calculating return. EBITA for 2010 was: 108.2M LTL or $39.3M USD Add in another 25% for the missing Q4 2011 and its up to $49M EBITA for 5 quarters ended Q4 2010. Now they also have $57.5M USD worth of selling and distribution, R&D, Administrative, and regulatory expenses for 5 Quarters ended Q4 of 2010. I have no idea how much of this 57.5M Valeant would be able to reduce. Maybe 50%? So now we are up to 68.05M for the 5 Qs ended Q4'10. This is EBITA - 50% of non cost of sales Expenses. This sounds a lot better than AZ's scenario, but I still have a really hard time believing: Valeant could "organically" grow sales the instant they took the portfolio turning 49M in EBITA 20% to 59M decrease costs by 70% to get to a 99M in cash generated. The B&L and Salix examples of 20% IRR are a nice thought experiment too. Valeant might have a good business model but their "Deal Model" looks very suspect. You can't do IRRs and assume the business goes under in Year 10. This is financial analysis 101 - you just don't do this. And for someone who claims that they diligently run through various 10ks and financials to "figure things out" to make this kind of blatantly wrong assumption - I just can not "reconcile" that. Not unlike AZ_Value can not "reconcile" Valeant financials. He can't reconcile Valeant, and I can't reconcile his analysis. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 You realize that you'll be crucified by Valeant bulls? Good luck No, we only crucify comments which are not substantiated by analysis. Just wanted to re-quote this comment from Mr. Upset himself. ::) Ya, I just crucified him because the analysis is not substantiated. I started with the IRRs, but I have a lot more I am holding back. Link to comment Share on other sites More sharing options...
Valueguy134 Posted August 27, 2015 Share Posted August 27, 2015 I'm loving this, because personally I haven't read a single 10-k on this company (I glance through the numbers but I don't dive in) and I bet most people spouting off how great this company is are in the same boat. I can tell, because, so few people bring numbers into the discussion, lots of opinions though. If numbers do trickle through, its pretty easy to disprove, since the mgmt presentations just can't seem to match up with 10-k's. Either way, while a 10-K doesn't provide all the "qualitative aspects", a management call doesn't really provide all the "quantitative aspects", however, there should be a reflection in each other, otherwise why bother printing a 10-k, just read the investor day slides, and then post a portion of the management call, and say we did our due diligence. Also, I honestly love the comments on IRRs, because it truly sounds like so few people know how the math actually works, the acronym sounds pretty cool though. Any front loading on the math is a favour to VRX. Does anyone know how spectacular the growth rate must be in outer years to achieve the stated IRRs if the cash does not take off in the early years. Anyways, back to the beans business. Who can I count on for an investment at the ground floor? Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 I'm loving this, because personally I haven't read a single 10-k on this company (I glance through the numbers but I don't dive in) and I bet most people spouting off how great this company is are in the same boat. I can tell, because, so few people bring numbers into the discussion, lots of opinions though. If numbers do trickle through, its pretty easy to disprove, since the mgmt presentations just can't seem to match up with 10-k's. Either way, while a 10-K doesn't provide all the "qualitative aspects", a management call doesn't really provide all the "quantitative aspects", however, there should be a reflection in each other, otherwise why bother printing a 10-k, just read the investor day slides, and then post a portion of the management call, and say we did our due diligence. Also, I honestly love the comments on IRRs, because it truly sounds like so few people know how the math actually works, the acronym sounds pretty cool though. Any front loading on the math is a favour to VRX. Does anyone know how spectacular the growth rate must be in outer years to achieve the stated IRRs if the cash does not take off in the early years. Anyways, back to the beans business. Who can I count on for an investment at the ground floor? ?? nice try Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. Maybe you guys aren't familiar with IRRs (although they are pretty basic and this board is filled with engineers like me who eat this shit up before we get out of bed, let alone for breakfast), they are very very simple. If you buy something for $100, and get cash flow the next year of $16 and every year after that, that is a 16% IRR. With a 16% IRR, that is a "payback period" of, guess what?, yes, around 6 years. So you only need a 16% IRR (if you assume quick integration and no growth) to get to the 6 year payback. Now go look at AZ value's "analysis" and tell me what the real IRR is if you take his year 10 number and extend that into perpetuity with zero nominal growth or negative real growth. Or even assume that that number is declining by 5% or even 10% a year after year 10. What is the IRR? Link to comment Share on other sites More sharing options...
Picasso Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! Where are you seeing zero in year 11? I think you are confused. Link to comment Share on other sites More sharing options...
Valueguy134 Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! Where are you seeing zero in year 11? I think you are confused. Are you shitting me? The point I am making is there is no zero, because there is no year 11. You don't go around doing IRRs on businesses assuming there is no year 11?!?!? In more sophisticated parlance, AZ forgot to include the terminal value of future cash flows from year 11 on in his cash flow for year 10. NOBODY, I mean NOBODY, does that. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Interest is 1/8 of the revenue, right. What is EBITDA over revenue? What is that ratio? Then put the two together, and tell me what the ratio of EBITDA to interest is. After that, let's have a conversation. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 Let's get some web links to an "IRR 101 class" here, that is what we need links to. We can't talk about Valeant's deal model if the people bringing up the issue or "bear case" don't know how to do IRRs or understand what a payback period is. Link to comment Share on other sites More sharing options...
Valueguy134 Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Interest is 1/8 of the revenue, right. What is EBITDA over revenue? What is that ratio? Then put the two together, and tell me what the ratio of EBITDA to interest is. After that, let's have a conversation. So it sounds like you haven't done the math, but I'll do you a favour and give it to you on an LTM basis. 7.38x Net debt/EBITDA 3.58 Ebitda/Interest Also, the magical thing about VRX, if you don't mention the amount you spend on CAPEX and acquisitions, you actually get that growth for free. Also, with that CFFO of 2.336 billion it would only take 15 years of plowing all that money back into debt to pay it down, but hey these patent cliffs, they are an immaterial event to VRX. But what do i know, maybe the explosive growth comes once the drugs become generics. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Interest is 1/8 of the revenue, right. What is EBITDA over revenue? What is that ratio? Then put the two together, and tell me what the ratio of EBITDA to interest is. After that, let's have a conversation. So it sounds like you haven't done the math, but I'll do you a favour and give it to you on an LTM basis. 7.38x Net debt/EBITDA 3.58 Ebitda/Interest Also, the magical thing about VRX, if you don't mention the amount you spend on CAPEX and acquisitions, you actually get that growth for free. Great, now as AZ_Value said, they always "magically" make their numbers and they have given 2016 projections not including IBD, so do that again on a forward TM basis including your best guess of the IBD impact, and we can get started on our conversation. Link to comment Share on other sites More sharing options...
Valueguy134 Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Interest is 1/8 of the revenue, right. What is EBITDA over revenue? What is that ratio? Then put the two together, and tell me what the ratio of EBITDA to interest is. After that, let's have a conversation. So it sounds like you haven't done the math, but I'll do you a favour and give it to you on an LTM basis. 7.38x Net debt/EBITDA 3.58 Ebitda/Interest Also, the magical thing about VRX, if you don't mention the amount you spend on CAPEX and acquisitions, you actually get that growth for free. Great, now as AZ_Value said, they always "magically" make their numbers and they have given 2016 projections not including IBD, so do that again on a forward TM basis including your best guess of the IBD impact, and we can get started on our conversation. Like I said, I only glance at the numbers, I don't dive in. But it's clear you have done your due diligence. Pass it along, I'd love the information. Link to comment Share on other sites More sharing options...
Picasso Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! Where are you seeing zero in year 11? I think you are confused. Are you shitting me? The point I am making is there is no zero, because there is no year 11. You don't go around doing IRRs on businesses assuming there is no year 11?!?!? In more sophisticated parlance, AZ forgot to include the terminal value of future cash flows from year 11 on in his cash flow for year 10. NOBODY, I mean NOBODY, does that. For someone who crunches IRR's and NPV's for breakfast I am surprised that you are so far off base on this one. You don't need to list year 11, he's only showing you the IRR's over ten years. It's a good thing he didn't go to year 30, 40, 50 because you're going to be looking at cash flows bigger than Berkshire Hathaway's market cap and the time value of money isn't going to give them much difference value versus what you are paying today. Like I said you can get a 6 year payback but end up with a very low IRR depending on what the returns after a few years look like. Management says 20% IRR but gives you no time frame for that to occur. If it's a 5-6 year time frame then there's no reason to even say there is a 5-6 year payback because that already implies a 20% IRR. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 Hey, everyone knows you put a terminal value in the last year of an IRR calculation on a business (and that terminal value generally is the discounted cash flows of all future years) or you don't finish with Year 10 as a terminal year, you provide many more years. Answer "yes" or "no", do you agree with that or not? Link to comment Share on other sites More sharing options...
Picasso Posted August 27, 2015 Share Posted August 27, 2015 There is no terminal value on IRR calculations. Oh and by the way, $16 dollars a year from a $100 dollar investment over ten years isn't a 16% IRR. It's more like 9%. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 And most importantly AZ never even said the company or asset is worthless in ten years. He's just saying what kind of crazy numbers you need to get there. He even shows you the crazy numbers in year ten which doesn't look bankrupt to me. More importantly it highlights how vague "20% IRR and 5/6 year payback" is. 20% over what time frame, a year? Then you get your capital back over 5/6 years? You can get your capital back in 5/6 years and still end up with very low IRR's. That is sort of misdirection in terms of what their guidelines for financial returns are. What are you talking about? What do you think is the "Year 11" number in AZ's calculation. I'll give you a hint: its "zero". And Year 12? Guess...its zero. Its zero, the business produces good money until year 10 and then produces ZERO thereafter. Now that's a patent cliff!!! So they spend a ton of money, and I mean a ton, cause if you weigh the $38 billion of debt they used to make purchases in dollar bills, I guarantee its over a ton. You can't come and say that they will make their money in the later years, interest just doesn't work like that. With interest being 1/8th of your revenue, you need cash now, you can't wait for the growth fairy to pop up in year 10 cause the debt will crush you. If you don't have explosive growth in the early years, I have a hard time seeing how it will explode in 10-15 years, especially with that patent expiring. Plus once you start going past 10-15 years, the value of the dollar drops significantly, with time value of money and all. Interest is 1/8 of the revenue, right. What is EBITDA over revenue? What is that ratio? Then put the two together, and tell me what the ratio of EBITDA to interest is. After that, let's have a conversation. So it sounds like you haven't done the math, but I'll do you a favour and give it to you on an LTM basis. 7.38x Net debt/EBITDA 3.58 Ebitda/Interest Also, the magical thing about VRX, if you don't mention the amount you spend on CAPEX and acquisitions, you actually get that growth for free. Great, now as AZ_Value said, they always "magically" make their numbers and they have given 2016 projections not including IBD, so do that again on a forward TM basis including your best guess of the IBD impact, and we can get started on our conversation. Like I said, I only glance at the numbers, I don't dive in. But it's clear you have done your due diligence. Pass it along, I'd love the information. So to help along, they just bought Salix with limited EBITDA / revenue recognition issues - where they are expecting significant synergies which will increase EBITDA and they are also expecting to work through the inventory/revenue recognition in 2015 (PLUS the IBD confirmation which opens up a whole new business but forget even that for now). Why would you include ALL the debt they used to buy Salix when almost none (ie only a quarter or so of the limited effectively pre-merger Salix EBITDA is included) of the 12 month EBITDA is included? And then you give me these ratios to start a conversation? They are as bad as starting the conversation with 1/8th of revenues. Wow, I thought we were trying to be diligent here like AZ_Value says we ought to be - God bless him. Link to comment Share on other sites More sharing options...
original mungerville Posted August 27, 2015 Share Posted August 27, 2015 There is no terminal value on IRR calculations. Oh and by the way, $16 dollars a year from a $100 dollar investment over ten years isn't a 16% IRR. It's more like 9%. Go back to school my friend. Link to comment Share on other sites More sharing options...
jay21 Posted August 27, 2015 Share Posted August 27, 2015 There is no terminal value on IRR calculations. Oh and by the way, $16 dollars a year from a $100 dollar investment over ten years isn't a 16% IRR. It's more like 9%. Picasso - you clearly don't understand IRR calcs. There's no such thing as a 10 year IRR. Just IRR which includes all cash generated from an investment. Can we look this thread for a few days until everyone cools off please? Link to comment Share on other sites More sharing options...
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