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Kansas City Southern Message Board

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  • mhirschey mhirschey Jun 4, 2000 2:08 PM Flag

    What's KSU Worth?

    Yahooligans:

    It's a little tough to value
    KSU becuse its Stilwell (Janus) assets are so
    uniquely attractive.

    Post split-off, Stilwell will
    be the largest, fastest growing and most profitable
    mutual fund company in the world.

    Second best
    might be T. Rowe Price and Associates (TROW). I like
    TROW a lot, and believe its P/E of 17.5:1 next year's
    earnings is easily justified. TROW is more profitable than
    almost all high-tech companies, and carries none of
    their obsolescence risk.

    However, I like KSU
    much, much more than TROW.

    At 17.5 next year's
    EPS consensus of $5.94, Stilwell's mutual fund assets
    are worth $103.95 on a pre-split basis. Today, the
    DST stake is worth more than $14 per KSU share, and
    the railroad should be worth roughly $7 per
    share.

    Add it all up, and KSU is worth at least $124.95.
    That is today's value, and that number is growing 15%
    per year, minimum.

    These numbers give
    credibility to the contention that KSU is a screaming buy at
    77 11/16.

    Choose your valuation method. KSU
    is cheap, and going up--a lot. Based on this week's
    price action, the market seems to be catching on to the
    fact that KSU is worth a lot more than the current
    price.

    I'm buying more on Monday.

    Best
    wishes,
    Mark Hirschey

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • reports today that AIG ($40B revenues) is looking
      at US mutual funds. AIG Asset Mgt chief says Janus
      "meets their criteria", but "God only knows what the
      price would be". After the spin off, my guess is that
      Janus alone could be worth $125-130 a share
      (pre-Stilwell). Probably explains some of last week's move. Very
      long KSU!

 
KSU
125.40+0.26(+0.21%)Nov 25 4:03 PMEST

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