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Focus Media Holding Ltd. Message Board

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  • matt.berry01 matt.berry01 Feb 1, 2012 2:25 PM Flag

    Goldman note

    Who do you consider professional? ... and professional what? Analyst or shepherd?

    If the above mentioned meet the popular standard of being "professional" then it might be an advantage to disregard that standard and resign oneself to being considered an amateur.

    If I have an excellent investment opportunity, then I would injure myself by looking for something better to do.

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    • Are you claiming that all professionals are conflicted while you're as pure as the snow is white (and, by extension, every investor sell FMCN)? Each investor has to do his or her own due diligence; however, since you are an admitted amateur short seller, your criticism of the Goldman analysts' objectivity is a laughable case of the pot calling the kettle black. I'll post a few other analyst remarks, though I'm sure you'll claim they're all in on the conspiracy (lol).

      • 1 Reply to jd9919
      • Bank of Amrica/Merrill note. As you may recall, they suspended coverage in the wake of MW's allegations. On 12/7/2011, they resumed coverage and issued the following report ...

        Coverage Resumed: BUY
        Equity | China | Advertising & Marketing Services
        07 December 2011

        Core business model remains sound; Resume at Buy

        We resume coverage of FMCN with a Buy rating based on our estimates for the cash generating capabilities of its core commercial network and reduced focus on large scale acquisitions since 2009. We point out that these were also the key reasons behind the upgrades in our rating in December 2009 (from Underperform to Neutral) and May 2010 (from Neutral to Buy) after most of the disposals of its
        value-destructive acquisitions in 2006-08 were completed.

        We use a primarily DCF-based PO, including US$0.50 from its 15% stake in VISN and a DCF valuation of US$33.50 (discount rate of 11pct, medium-term 13-15E FCF CAGR of 20%, and terminal growth of 1%), to better capture any major
        cash outflows related to acquisitions. P/E-based valuation may give credit to earnings brought from acquired business but in our view overlook the impact of
        cash outflows in acquisitions. Our valuation is based on fundamental cash flows of ongoing business, and does not rely on anymore disposal value of the noncore business nor market sentiment. We expect the release of a positive
        independent audit report on LCD screens, no further major acquisitions and continuous delivery of cash flows from the core business in the upcoming quarterly results to improve investor confidence in the current financial condition
        of the company and to reduce the overhang issue.

        We set out below the company’s response to the principal allegations made by MW in its report and our view on the matters that are the subject of the allegations.

        continued ...