Packer paid too much
Anyone who made money after reading my take on James Packer’s raid on the Ten Network on Tuesday should be warned that my favourite company assessor, Roger Montgomery, thinks Ten’s intrinsic value is only 65 cents! Read Peter Switzer’s insights.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Lloyd Taylor
:
Roger,
I nearly fell over when I read this from Switzer….
“In conclusion, if you want to treat the stock as a speculative play, well go for it, but it does not pass my favourite test — is its intrinsic value greater than its share price — and that’s why I am passing on the stock.”
Looks like you’ve got a new convert in Peter S. Well done! But will he hold the line on Sky Business Channel’s Switzer? If so, he won’t last long as the list of companies meeting his criteria is rather small and what about the rest? Quite a dilemma he faces!
Regards
Lloyd
Lloyd Taylor
:
Roger,
“I asked Montgomery why Packer could have paid so much more than the intrinsic value of the company and he said that media moguls have made mistakes in the past. But he also said Packer could have a plan to make changes that would change the intrinsic value of the company.”
Very generous assessment. I particularly like the ambiguity of the last sentence… no mention of the likely direction of change in IV… up or down? I have my view and I suspect you have yours. LOL.
Regards
Lloyd
Roger Montgomery
:
Hi Lloyd,
I am delighted someone picked it up. Well done Lloyd.
Andrew
:
Hi Roger,
I think i sent somethine into your QR article saying something similar. I had the IV going down year on year due to declining ROE, that coupled with the rumored plan by CPH to set the dividend payout ratio at 100% gave the IV declining down to $0.70 in 2012 which i am using as my IV for ten (not that i would ever buy it) as it is the low point in my valuations.