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Huntsman Corporation Message Board

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  • zoomlik zoomlik Jan 1, 2009 2:04 PM Flag

    will HUN go BK ??? here is my analysis

    Nice work. I was taking a reasonably worst case scenario to find a lower bound. In my follow up message, I did describe the upsides including a lower cost of revenue than I had initially projected.

    Your spread sheet is very good start. Cash flow analysis is more important than GAAP EPS, as HUN's viability over the next 2 years is based on cash flow.

    I think the $25M you have for merger is perhaps too high.

    Other than this i think it looks good and also leaves more upside (e.g. cost cutting)

    I try to avoid looking at Book value or GAAP EPS. For example, book value now contains $3B for inventory and Receivable which probably have deteriorated considerably in value due to recession.

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    • Zoom, Glad you liked it. Also, I agree that CF is more important, but you need NI to estimate CF. So, while this is adequate to address concerns about bankruptcy risk, it is not ideal. However, since I am not trying to estimate the actual number, but just gain reassurance that under dire conditions the firm will make it through this poor economic situation it is all I need. Therefore, I predict HUN will be worth >10/share in two years. I will take this type or return anytime.

      You comments about the decrease in value fo inventory and AR are valid, but I am not concerned.

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