The Business of Value Investing.pdf

96 The Business of Value Investing What Is Intrinsic Value? Every business has an intrinsic value. According to John Burr Willia ...

Effective Business Valuation 97 Table 6.1 Discounted Cash Flows of 10 Percent Low - Risk Investment Year Free Cash Flow Present ...

98 The Business of Value Investing For the most part, however, cash fl ows are never guaranteed, and that ’ s why the intrinsic ...

Effective Business Valuation 99 When valuing the cash fl ows that a business will generate years from now, you need to discount ...

100 The Business of Value Investing than 3.75 percent. The issue then becomes what rate is appropriate: 5 percent, 10 percent, 1 ...

Effective Business Valuation 101 There ’ s a good reason why guys like Buffett stick to simple, easy - to - understand businesse ...

102 The Business of Value Investing A strong franchise or brand that gives the company insula- tion from most of the competitio ...

Effective Business Valuation 103 and American Express have rewarded people who have invested in them for the long term. Odds are ...

104 The Business of Value Investing Soft Pillow an earnings value of $ 100 million (earnings value  1/ cost of capital of 10 pe ...

Effective Business Valuation 105 build a new soft - drink company to compete with Coke, you couldn ’ t do it no matter how brill ...

106 The Business of Value Investing Value Investing 401: Calculating a True Intrinsic Value By now it is clear why the concept o ...

Table 6.3 Ensco Corp. Cash Flow StatementUSD (except for per share items) 12 Months Ending 2007–12-31 12 Months Ending 2006–12-3 ...

108 The Business of Value Investing Table 6.4 Ensco Free Cash Flow ($ millions ) Year CFFO Cap Ex Free Cash Flow 2004 $ 256 $ 30 ...

Effective Business Valuation 109 Table 6.5 shows a discounted cash fl ow analysis for Ensco over the next fi ve years. To be con ...

110 The Business of Value Investing growth rates given, a multiple of 12 times 2013 free cash fl ow would be appropriate. The co ...

Effective Business Valuation 111 reasoning are right. ” That ’ s also why Warren Buffett, the best inves- tor on the planet, spe ...

112 The Business of Value Investing Putting a great chief executive offi cer (CEO) in a great company is like icing on the cake. ...

Effective Business Valuation 113 Understanding all of this information helps put the manage- ment factor in perspective so you c ...

114 The Business of Value Investing Dell, founder of Dell Computer, a multibillion - dollar company ( $ 23 billion as of Decembe ...

Effective Business Valuation 115 others who feel it ’ s refl ective of the responsibilities of the job. For purposes of this dis ...