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Kansas City Southern Message Board

  • mhirschey mhirschey May 30, 2000 5:31 PM Flag

    What's KSU Worth?

    KSU seems to be worth much more than its present
    price when the individual parts are valued
    seperately?

    I calculate the company is worth in excess of
    $107.

    What's your number?

    Best wishes,
    Mark Hirshey

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    • I posted my rough calculation in post #1795. What was your breakdown?

      • 1 Reply to UNKLBRAD
      • 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

 
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