Or ABFI- is it another Nextcard, or another Metris?
And Trep's weird little Swiss/Yukon whatthehell is getting harder to resist too.
I'd like to buy yer Merck at twelve times, but sheesh every time the blue chips start looking attractive, there's always some cheaper smaller more toxic crap out there that starts batting its eyelashes at me. "Hey, there, big boy. My, what large eyes and teeth you have. Can I stroke those long lovely ears of yours? Carrot? Sugar cube?"
Following this sale, Sea Containers indicated that they used the proceeds to repay debt and thus annual interest savings would amount to 21 mios. Not a bad sale indeed: 19.7 mios of ebit becoming 21 mios earnings.
And then the following:
The same year, Silja, a ferries operator, became wholly owned by Sea Containers:
Well it isn't really clear if the core businesses are generating cash or not. All of the cash provided by operations and the cash from sale of assets went into repaying debt, cap ex, acquisitions, and increasing working capital. If the core business isn't really generating cash, it isn't worth anything. Considering that it is a highly leveraged mediocre business, I don't see much to get excited about.
And yet after generating $98M from operations and $229M from sale of assets in 2003, the company borrowed another $52M. And this was after raising another $69M from the sale of OEH shares in 2002. And they also issued $25M of equity in 2003 and filed a shelf for $150M more debt. Where is all this cash going?
The last I looked the debt wasn't at very good rates, 7-13% IIRC.
OEH is a superior business in terms of margins, returns on capital, etc. but it isn't really a cash cow either. But I don't blame OEH for wanting to be out from under the lead umbrella of SCRA.
I can see the net asset angle on it, but I'd probably only be willing to buy SCRA for equal or less than the value of the OEH shares.
Yes, that's always true. There are always 'cheap' alternatives. These are more often trading tulips than planting tulips. In these circumstances, one is usually leaving oneself open to the vagaries of the market. �Will someone pay more� is the question.
Given that, what are some trading tulips that would might turn planting tulips. Therein lies future returns. Feel free to share.