My back of envelope calcs (now from memory so Ill probably get it wrongish):
Assets about 210m, Tangibles 190m give or take.. 30m cash.. Current LIabilities 30m, Non current 30m of borrowings all give or take.
NPAT in 08 75m... current market cap still a little high @ 800m odd ... putting it on a PE of 11x or so.. not yet cheap...
However - ROA historically been 75/210 or 36% - thas as good as any... and debt is very very low - quite attractive in such times!
Question is, what will future earnings be... I expect that much of their sales will be already contracted for some time ahead - no idea how much - havent looked.. but lets be conservative and cut earnings over next 2 years down to 50m/year ... although management has proven to be smart and shrewd... the Bassats are shrewd operators... good board etc.
My long term question on Seek has always been how will it grow... already strong market share here and I dont think it will outcompete local operations in other countries - leaving it to find things to expand into like training (which is what it has done) - non-core add ons my opinion - mind you they sell them quite well under the pressure tactic of 'get a better job with these [overpriced] online training courses' - so they have found synergies there...
I cant see ROA continuing at such strong levels and Im sure earnings will be diminished. I looked at it long and hard @ time of listing [2-3 yrs ago?] and rejected it then @ 2.20 / share when it was making 35m odd... I just thought it was too expensive on PEs of 18 ... and in his climate I still think i too high @ 11x
... below $2 I think it starts to get interesting if it gets there.. and @ 1.50 is a nice bargain.
Cant help but think of seek as a website [thats my personal prejudice, I know], even though they are more like a media company - but how market can value SEEK as high as 1/3 the value of Fairfax or more has always eluded me... (then again so has farifaxes 6.5b of intangibles...!)
SEK Price at posting:
$2.86 Sentiment: None Disclosure: Not Held
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