Mr Montgomery's Holdoing 2%, page-19

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20,401 Posts.

1990

03/03/17

11:49

Post #: 23073908
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Originally posted by madamswer ↑

Well
I am not sure how you can even pretend to put a probability on a TO as you like us simply have no idea . It could be zero or 100% . I do agree though you don't buy on hope of a TO unless you are buying something were someone has a strategic holding.

My 20% figure was not intended to be prescriptive, rather indicative.
I apologise it you took that figure literally to be an accurate estimate on my part.
I merely put out a figure of 20% to indicate that I thought the odds of a takeover were low, as opposed to high (in which case I would probably has written "80%").

"So my view is the stock has been priced in a way that suggests the blip is eanrings is permanent and I don't think it is medium term . A while ago I read Seth klarmans book safety of margin and it outlined how insto selling can provide some of the best entry opportunities as for them its insignificant to returns whether they sell slowly or dump holdings and drop price another 20#. I agree the rerating may not be immediate but what we have here is a stock that is being priced for zero eanrings upside , thus the pendulum has swing to upside being far greater than downside from here"

As for what instos are or aren't doing, or why, I have long-learnt never ever take my cues from such externalities, but to rather focus on valuation.

As for pendulum swings, what do you think the stock multiple will swing back to?
10x EV/EBITDA?
12x?

Expand

Madam
Ofcourse its not prescrpitve but you indicative % is equally as baseless. Putting a % on it suggest some kind of factual basis which there is not

I think what will cause a rerate is
Both revenue improvement, cost reduction to improve EBIT and sentiment to elevate multiple

ISD Price at posting: $1.48 Sentiment: Buy Disclosure: Held
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0 Great analysis

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