Bill Nygren: Investing without a catalyst
In a recent interview, Bill Nygren from Oakmark reflects on his 40-year investment career, highlighting the significance of both financial metrics and management quality in selecting companies.
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A few days before the initial public (IPO) of Birkenstock Holding plc (yes, the ones with the characteristic sandals), Professor Damodaran wrote a blot post with his valuation of the company.
At the same time, he used the valuation to argue that intangible assets should not be seen as an independent item in the valuation, but as part of our input in a Discounted Cashflow (DCF) calculation. He shows which intangible assets he sees in Birkenstock and where in valuation they create added value.
Damodaran concludes that the IPO price of €45-50 is at the high end of the spectrum, but writes that he is interested when the price gets below €40.
At its offering pricing of €9.2 billion (€45 to €50 per share), the company and its bankers seem to be betting that the good vibes about the company will outweigh the bad vibes in the market, but that is gamble. […] It is, in my view, a reach at €45 or €50 per share, but if the market turns sour, and the stock drops to below €40, I would be a buyer.
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