Drawing on valuation precedent., page-36

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noomxx

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02/10/23

22:18

Post #: 70137610
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Originally posted by madamswer: ↑

"CSL has always been run like a high growth tech company rather than a pharmaceutical company. It used cheap loans to constantly make acquisitions and buybacks..The result is a mountain of debt, very little cash "

At last reported balance date, the company had US$1.5bn cash. Sounds the opposite of "very little" to this little pilgrim.

As for "mountain of debt":

After US$12.3bn acquisition of Vifor in FY2023, the company entered the current financial year with Net Debt of US$10.7bn.

For context, the company will make something like US$4.3bn in EBIT and US$5.4bn in EBITDA this year, so that puts Net Debt-to-EBIT at around 2.4x and NIBD-EBITDA at 1.9x.

Even for the average, garden-variety company, those would be acceptable metrics.
For a cash-generating juggernaut like CSL - where Operating Cash Flow covers Investing Cash Flow by a factor of around 2 times, it's a nothing issue. Organically, the balance sheet will get back to being considered lazy in short shift.

If one really felt the need to expend energy fidgeting with one's worry beads in relation to CSL, then there might be other aspects of the company in which to do so.

But, demonstrably, the state of the balance sheet isn't one of them.

.

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Figs might fly point might be a bit out, especially around return vs inflation adjusted numbers.

But Figs might fly other points, including essencially PE ratio's, has been a simplistic heads up, against the risk free return.

So far Figs Might Fly has been the sole poster on CSL that is actually correct!!! At least for the last several years.

As much Figs Might Fly has bee constantly derided by the CSL cheer squad. For those that listen to him, you would have saved your capital!!!!

All I can say is Thank You Mr Pigs My Fly.
You have bee proved to be correct over the last several years.

CSL Price at posting: $246.36 Sentiment: None Disclosure: Not Held
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