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CVR Partners, LP Message Board

  • richardleeds richardleeds Sep 24, 2013 9:07 PM Flag

    shares still look overpriced to me

    I looked at the most recent balance sheet.
    The plant was acquired for around $400 million.
    The stock is selling for three times the purchase
    price of the plant.

    That makes no sense to me. Why pay triple the
    cost of the plant? How long will you have to earn
    a 10% dividend or a 12% dividend to pay back
    the price of that plant if you purchase the stock
    at the current price? It looks to me that after 30 years
    the dividends returned will equal the price of the plant.

    That looks pretty darn expensive to me.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Bullsh-- statement. The plant was turn over a book value from CVI as part of the sspin off. I have not check the books, but if 400 million was the depreciated value it does not represent the replacement costs for these assets. To value a company you generally look at cash flow not book value because of the accounting depreciation factors and replacment value of the assets which are not generally represented by book value. Most good companies sell for may times book value because of this.

    • did they make any improvements tot he plant and are they increasing the earnings or volume in this plant? I doubt it but could they have gotten a good price when they bought the plant?

 
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