No. of Recommendations: 7
Nice but not table pounding value... I would put 6x and 20x as the lower-midpoint on the valuation multipliers; probably more upside than downside from those levels.
That sounds sensible. And even those numbers are far from conventionally cheap.
In my mind the attraction comes more from the resilience of the future profit stream. I don't think it matters much if governments come down on them and they are forced to divest or spin off businesses--it just becomes a sum-of-parts valuation. History is not a perfect guide, but other companies in this situation have treated patient investors very well on average in the last century: when they come after you for being an obscenely profitable near monopolist, it's usually true. That's terrible for consumers but a great thing for investors, and the imposed remedies never seem to remove that quality very effectively. If you owned Standard Oil in 1911 and instead ended up with holdings in the 34 post-breakup entities, you did just fine.
So no, not table pounding, but I believe it is probably a slightly better than average entry level for a long term coffee can holding. I added more yesterday with that in mind and I expect to add more if/as it falls more.
Jim
