Disclaimer:
I have posted this on both BUB and JAT boards in exactly the same format. My interest is in creating a discussion of the difference between the two companies, which seem to be at similar points in their journey with comparable revenue numbers. It would be great to hear people's thoughts about the reasoning behind the price differential between the two companies. Here are my thoughts, and as usual, this is not financial advice, because I'm just a fool on the Internet.
Observations:- BUB much healthier debt ratio, though balance sheet is a little "fluffed up" with high level of intangibles.
- JAT is a more efficient business with a better operating margin, though this is counterbalanced by high levels of debt.
- Both companies growing at similar rates, with JAT showing signs of more rapid growth, likely at the expense of taking on large debt levels
- BUB is operating in a market with far less risk in terms of global conditions, though has a far smaller market in which it operates.
- JAT growth leverage could see it crash and burn, or soar very high, depending on market conditions.
- Both companies show solid revenue growth over the last 5 years and continue to expand their product lines.
- While it's clear JAT brings more risk to the table, BUB's valuation at 10 times JAT's is noteworthy.
Keen to hear your thoughts. GLTAH.
(20min delay)