Cash Vs. Stock Acquisitions: What’s Driving The Bus?
“If you aggregate all of our stock-only mergers (excluding those we did with two affiliated companies, Diversified Retailing and Blue Chip Stamps), you will find that our shareholders are slightly worse off than they would have been had I not done the transactions. Though it hurts me to say it, when I’ve issued stock, I’ve […]
Everything You Need to Know About M&A Synergies
“Why do mergers and acquisitions carry such a high degree of risk? In almost all cases, the seller, who has operated the business for years, knows much more about it and its weak spots than does the buyer.” Phil Fisher Companies allocate more on mergers and acquisitions (M&A) than any other option for capital allocation. […]
Calculating Intrinsic Value with a DCF Like Warren Buffett Would
“Intrinsic value is an all-important concept that offers the only logical approach to evaluating the relative attractiveness of investments and businesses. Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.” Basehit Investing These thoughts come directly from page […]
M&A As A Growth Strategy
Merger and acquisition activity drives much more growth than investors realize, and many companies practice mergers and acquisitions or M&A as their main source of growth. Companies such as Google, Microsoft, Facebook, and Constellation Software use M&A as a means to sustain or continue their growth. Between June and April of 2021, there have been […]
Simple Merger and Acquisition Terms for Beginners
Learning M&A is a little like learning another language. Understanding the different terms associated with M & M&A will go a long way to understand why companies undertake this process and what they hope to gain for the company and shareholders. Having a common understanding of the most common terms used in general M&A conversations. […]
Mergers and Acquisitions: Easy Basics for Beginners
Global mergers and acquisitions (M&A) volumes hit a record high in 2021, overtaking 2020’s deals. According to Refinitiv data, the total volume of completed deals, along with those in the pipeline, is $3.6 trillion in 2021, with three months to go, passing the $3.59 trillion of 2020. Mergers and acquisitions are on the upswing, typical […]
DCF for Bank Valuation: Step-by-Step Guide with Real-Life Examples
Did you know that the financial industry makes up $8.81 trillion of the market cap of the stock market, which is 13% of the market, third-largest by market cap compared to tech and consumer discretionary. Most investors ignore or pass the financial industry by, largely because they don’t understand the industry or valuing those companies. […]
Bond Valuation Overview (With Formulas and Examples)
Updated 6/15/2022 “An investment in knowledge pays the best interest.” Benjamin Franklin As investors learn more about our investments, we become better investors. One of the many things I enjoy about investing remains the continual learning and the bottomless subjects to learn. In that vein, learning to value a bond is high on my list […]
Valuing Young Companies: A Complete Guide Using a DCF (FCFF) Model
Valuing a young company is one of the more difficult tasks in valuation. Trying to pin a value on a young company, startup, or idea business is difficult because of little or no revenues and large operating losses. Other challenges are the short financial histories of young companies, plus the dependence on outside capital to […]
Building a DCF Using the Unlevered Free Cash Flow Formula (FCFF)
“Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.” –Warren Buffett Cash is the lifeblood of all companies, and determining the fair value or intrinsic value is a matter of calculating what the cash flow of the future […]
