If there is one thing I have an abundance of, it is patience. It's as Warren and Charlie often say - if you can't see yourself holding equity in a business for 10 years you shouldn't even think of holding it for ten minutes.
Ultimately Mr Market will be a weighing machine in the long run, and if Sky continues to earn as I have projected (conservatively, in my view) then the market valuation will eventually sort itself out.
In the meantime, the significant discount to my estimate of IV does have other downsides though that have nothing to do with my temperament.
For one, it potentially attracts unwanted takeover attempts (none have happened so far, and perhaps none will - but it is still more likely to happen with a low MC).
It restricts Sky's ability to take advantage of other opportunities. Judging by Sophie's comments, Sky has no intention of becoming a Telco. Fair enough, but even if they wanted to buy Vocus NZ (assuming a 'sensible' price could be agreed on), Sky would struggle to get the money together because lenders would look at the low MC and feel nervous. Who wants to lend a company with a market valuation of $300M half a billion dollars for an acquisition?
So though I am not worried about the low valuation from a personal investment strategy perspective, it would be good to see somewhat more of a lift in quoted value reasonably soon for the overall health of the business.
Add to My Watchlist
What is My Watchlist?
