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17:28
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Originally posted by stockanalysisguru:
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The AASB16 impact you and madamswer have mentioned are particularly relevant for valuing edv. The EV/EBIT and EV/EBITDA multiples I still in my head have anchored to the old multiples that were used pre AASB 16. Unless we adjust for it (AASB 16 impact), I think we have to move to a P/E multiple to value this one, as has been mentioned the "D" and "I" from leases are disproportionately large for edv compared to most other businesses so the relevant multiples for EV won't be comparable unless we adjust them (unfortunately then we need to adjust other businesses as well to compare if we are trying to work out relative value). I still think of the operating lease payments as operational expenses fwiw and for valuation purposes I think we have to think this way, otherwise we are valuing different companies differently (i.e. we need to adjust for aasb16 impact). My shortcut method is for companies that have very little leases can use the most relevant of ev/ebit or p/e, companies with significant leases use p/e unless I have the energy to calculate adjusted ebit/ebitda.
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I have read 'the little book that beats the market' is that what you are referring to? To be honest though I have probably learnt less from investing theory books and more from trial and error through a decade in the market. I wish I had started investing small amounts from 18 years old, instead of from age 30 - it is advice I offer to any younger people willing to listen.
(20min delay)