Musings on Markets
JANUARY 28, 2024
In short, if you don't like betas and have disdain for modern portfolio theory, your choice should not be to abandon risk measurement all together, but to come up with an alternative risk measure that is more in sync with your view of the world.
Musings on Markets
MAY 20, 2022
In a final assessment, I break down companies based upon operating cash flows (EBITDA as a percent of enterprise value) and dividend yield (dividends as a percent of market capitalization). On bond ratings, there is no discernible link between ratings and returns, until you get to the lowest rated bonds (CCC & below).
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Valutico
AUGUST 17, 2022
With Valutico’s new development, practitioners can quickly perform a VC valuation based on EV/Sales, EV/EBITDA, EV/EBIT and P/E multiples as a useful addition to other research on the company and the industry. The calculation of these discount rates are based on the observed betas of similar listed peer companies.
Musings on Markets
FEBRUARY 27, 2023
One simplistic proxy for this cash generating capacity is EBITDA as a percent of enterprise value (EV), with higher (lower) values indicating greater (lesser) cash flow generating capacity. Debt to EBITDA, Interest Coverage Ratios If debt to capital is not a good measure for judging over or under leverage, what is?
Brian DeChesare
MAY 3, 2023
In our forecast, Cash rises too much, and Debt / EBITDA goes from 5.0x Dividend Discount Model, Part 4: Present Value of Terminal Value and Dividends Since the Dividend Discount Model is based on Equity Value, not Enterprise Value, the Discount Rate is the Cost of Equity: Risk-Free Rate + Equity Risk Premium * Levered Beta.
Brian DeChesare
AUGUST 10, 2022
If Midstream companies want to grow beyond the fee increases written into their contracts and possible volume growth, they need to spend on Growth CapEx and estimate the incremental EBITDA from that spending: Further adding to the complexity is the GP (General Partner) / LP (Limited Partner) structure used at most MLPs.
Musings on Markets
JANUARY 6, 2023
By the same token, it is impossible to use a pricing metric (PE or EV to EBITDA), without a sense of the cross sectional distribution of that metric at the time. For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive.
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