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You Can Buy These Companies' Cash At Up To A 60% Discount
Several days ago, some were confused to read a Bloomberg article about Chinese cell phone maker HTC whose market cap dipped below its net cash (it has no debt), meaning one could buy its cash at a discount. Since then HTC's stock has continued sinking, and as of today, using CapIQ data, the company's cash of $1.7 billion, which the market is assigning value to as its only asset, was worth about 55% more than its entire market cap. This means that if one were to buy the company today, and liquidate it as it stood the same day, one would - at least on paper - buy the company's cash at a 36% discount and end up with an immediate cash profit of more than 50%.
Said otherwise, HTC now has a negative Total Enterprise Value (market cap plus debt less cash).
It isn't the only one: in this "baby with the bathwater" selling which we have seen in the past few weeks especially in EMs and China, various other such opportunities have presented themselves, and to assist readers who may be looking to buy cash at a discount of as much as 60%, we have compiled a list of some of the most prominent global companies with a negative TEV, and whose cash can be bought at a substantial discount to fair value: in some cases as much as 60%.
Of course, it goes without saying that if a company's cash is trading at 60% discount below fair value, there probably is a reason. So before anyone blindly rushes into these discounted opportunities, feel free to find out first just why the cash can be bought at 40 cents on the dollar...
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You left out the cash-burn rate column.
EBITDA
i think you need a balance sheet for cash flow?
anyway, can we have the Deer please!
Scooby says "Where's uncle Carl?". He'll save the USSA!
http://s24.postimg.org/i4ybtcpw/2011_07_18_091_mama_possum.jpg
Nambla.
Who gives a shit about Total Enterprise Value? It is a casino.
Presently, the Banking Mafia is destroying the US economy and ruins most successful businesses.
EBITDA doesn't cut it for me, but what do I know? I do all of my accounting and analysis on a cash basis, not accrual.
Plus, I have seen a lot of cash disappear to interest, taxes, depreciation, and amortization.
I prefer non-GAAP EBITDA, it has worked so well for valuation up until... about 4 days ago
GAAP Free!
Caution: May contain high amounts of I, T, D, and A.
Actual contents may vary due to window dressing.
Some settling of product may occur due to insider transactions, follow-on offerings, etc.
Use before last quarter.
Mmmmmmmmm. It is delicious...especially the stuff from China!
Ok---I agree and also wouldnt trust the financials of most Chinese companies (Yes I know HTC is different and a Tiawanese company) as there has been and will continue to be fraud and inaccurate financials come from there.
More importantly, how did you copy and paste a picture--I have tried that a few times without success on this website.
Cant believe I maintained my concentration to type all of that with the hot lady on the roadkill tshirt ad sitting there reply box
One must be a special snowflake type occasional poster of content to be allowed to add said pics to a post.
HH posts an article here on occasion, typically a good read.
Indeed.......
Time to go on a solo vacation .. oof
Vacationing Solo Is More Popular Than Ever....Call me at 90%.
HTC isn't Chinese.
I believe its Taiwanese.
Buy it before it gets cheaper.
Fak Num Bars
Anyone out there have any insight on what happened in the gasoline market right after close?
anyone know why gas is still 50 cents higher here than mid winter ...while Brent has fucking collapsed?
Yup, Its called overheads and thats a fixed cost. Oh and a little skimming in the vertical Intergration Model keeps the oil company alive
Weird. A 7 cent jump while crude goes down a dollar. So unless a refinery blew up somewhere...Also, how can the dollar take a dump of over 1%, yet the PM's go nowhere? In fact, silver down almost 2%. Guess they were so busy making sure the PM's didn't take off, that they forgot to prop up the market. Whoops! Guess that's what happens when you try juggling some blades, a torch, and a couple of chainsaws. It's going to end ugly.
TELL ME HOW ONE CAN "GAUGE" VALUE - [ENTERPRISE OR OTHERWISE] WHEN THE PRICE OF MONEY IS ZERO. HOW THE HELL CAN YOU PRICE ANYTHING WHEN THE PRICE OF "THE MONEY" IS DISTORTED!!!
HUH? ANSWER ME THAT!
KEEP YOUR TRADE!
HOW THE HELL CAN YOU PRICE ANYTHING
I paid $2.31/gallon of gas this morning. The pump seemed accurate.
Nailed it Dog..
Nailed it Dog..
Share price x number outstanding. Pretty simple.
Tell me you wouldn't buy the company if you could immediately take out more in cash than your purchase price. That is what this article says.
I like Limited.
Sales better than Walmart!
HTC is a Taiwanese mobile phone company based in Taoyuan, Taiwan.
Not to imply I have the fundamental side of the house down cold, but if you can't trust the numbers with American companies, so how do we know the numbers we are seeing in Chinese companies are accurate? I don't trust their dog food, their baby formula, or their accounting.
These aren't Chinese companies. They are companies that do business in China. Not the same thing.
Namura is japanesse shipbuilder based out of Osaka.
But then they build oil carriers mostly. Fuck!
Fixed it for you *I'm sure they feed their children dog food with real dog in it as baby formula. I don't trust it or their accounting.*
There may be a fucking reason - try again.
In the USA we like to value corporations with negative cash flow and negative revenue at a quarter of a trillion dollars.
The Chinese are doing it wrong. You aren't supposed to try and make money and NEVER EVER have a positive enterprise value. Debt is what scores a massive equity valuation.
THE MOAR DEBT YOU HAVE, THE MOAR YOUR COMPANY IS WORTH!!!
It really is simple math.
by golly, you on to something there.
CCCL is a Chinese co. theoretically selling at a >50% discount to cash. But who can trust a Chink balance sheet. Carnage always leaves some wounded animals to corral and ride as they heal.
Put some of the Red Chips like CNOOC (NYSE: CEO) up on your screen and wait a while.
If I had some sense those numbers were not lies, I would try to buy a few of those somehow. But in a country where everything is a lie.... I have serious doubts that somehow the management of these companies is made up of the rare honest people in China.
Tyler - Keep it coming. Good stuff and investor commentators raising the right questions and bringing up other opportunities.
Agreed
OH HELL YE...Ah crap it's in fiat. All these zero's are meaningless...
Ummm... HTC is a TAIWANESE cell phone maker. We have our own flag, remember?