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Cendant Corporation (CD) Message Board

  • indytom98 indytom98 Jul 16, 1998 2:18 PM Flag

    Former CUC accountants...Where are they

    Where do former CUC accountants wind up finding

    Just got back from lunch break during which I heard
    media report about Clinton and Republicans battling
    over how to spend Federal Government surplus. You know
    that surplus created by sliding over all those Social
    Security trust funds into the budget revenues ledger.

    Just stuck me as amusing that it had to have been
    these same guys doing the CUC accounting...

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    • Did you make a mistake? JD thinks that in 2 years
      we'll have $3 billion in cash flow but only $1 EPS. If
      so, why would the stock trade at 40X - 45X

      Also, if you are correct, what does JD think EPS will
      be for '98 & '99? Assuming 20% growth (which may not
      be accurate), is he suggesting that we now (for FY
      '98) have EPS of less than 70 cents per share? That
      would imply EPS for '97 of less than 60 cents per
      share, meaning that he foresees more major restatements

      I think you must have a typo on the $1
      EPS. If not, no way will this be a $40 - $45 per share
      stock by then.

    • I posted a few days ago about the biggest
      positive for CD. I think that a buyout or merger with this
      stock is a real possibility. With the recent press that
      the LBO funds (KKR, Forstmann Little, etc) have been
      getting about nothing to buy and too much money to throw
      at things, I believe that these companies might take
      a keen look at CD.

      First of all, let's face
      it: CUC is a big pile of crap. So, basically the idea
      is to buy the company, sell CUC for what you can,
      oust the board (including Forbes), possibly keep
      Silverman around (maybe not). Then, you have gotten rid of
      a lot of your problems: CUC is divested, the
      world's worst board and Chairman are gone, and the
      company is taken private, where you don't worry about the
      stock price for a few years, giving yourself enough
      time to get the "synergies" and cross-marketing things
      going. Then, in about 3-5 years, you take the company
      public again, investors have forgotten about all of this
      crap, and the LBO firms make out like bandits.

      Folks, in my opinion, this is becoming a very likely
      scenerio, and may explain why this stock isn't in the
      single digits yet. I would keep an eye out for SEC
      filings (13D) for someone buying up > 5% of the

      As a takeover play, this stock has
      potential. As a growth stock, until you get rid of the dead
      half of this stock, I don't see much potential.

    • John Dessauer, one of Wall Street Weeks top stock
      pickers recommended CD at 23 a few weeks ago when the
      stock took a drop. This past Tuesday(July 14, 1998)John
      had a special hot line update on CD for his
      subscribers. In summary he stated that CD has a strong and
      vibrant balance sheet and has positive earnings. CD also
      has scores of valuable business which, if necessary,
      could be sold off to raise cash. He believes that
      Walter Forbes' days are numbered and that he will be
      forced out either by the board or by the the
      stockholders putting pressure on the board. Silverman has
      clearly been embarrassed and moreover he has lost his
      fortune. All his stock options are now worthless at this
      price. Dessauer believes that in two years the company
      will have $3 billion in cash flow and earning over a
      $1 a share. If those figures come about the stock
      could be at $40-$45 a share. Silverman wants to deliver
      to the shareholders and wants his reputation and his
      net worth back. Thus, he has to make CD go back up.
      Dessauer who is a shrewd stock picker and has done fine by
      me says to use this sinking spell to accumulate more

    • what elese could cendent not report. Think that
      they would be very careful from here on in, as they
      could get delisted very quickly if sec looses
      confidence in the rest of the management team.... Just

    • Leave it to the analysts to figure out how to
      make more M&A fees on this debacle.

      following this board, I cannot believe how little attention
      is being paid to three years of inadequate audits.
      Methods of recognizing revenues and proving them is the
      one part of an audit or due diligence that you don't
      mess up, not to mention other out and out errors.
      Maybe this is a great case study on the value of
      unqualified opinions in annual reports. Let's hear it for the
      CPA industry.

      Also, cannot help wondering how
      many of the CUC Board members have been on the audit
      committee all of these years. What did they think their
      role was???Hope all of the CUC directors have great

    • RII, why not be in Wayne's World. I already am.

    • Based on no changes to the CD structure and
      personnel, and an audit that will state what is now known.
      How far will CD slide from now until

      Please provide some basic support for your values, and
      any caveats to what might change your guess.

      am projecting that based on:
      no technical "buy"
      an at-risk management team
      earnings on 98
      $1.00 - $1.04
      earnings in 99 only $1.14 -

      CD price will could drift to 12-13 and will
      re-settle between 14-15 until there is any positive news.
      But with the market at records highs, I could foresee
      any potential jump from positive news (non-negative
      counts also) could be offset by market correction in
      August. Therefore this could be dead money. I do not
      foresee Sunbeam prices because CD will show profit, but
      market cap to revenues of 1:1 like SOC would bring CD to

      CD's industry is not my professional area of expertise
      or focus and therefore have little to benchmark
      against, but on a personal level I am interested in the
      investment potential.

      • 1 Reply to JTDOG87
      • I believe your earnings estimates are on the low
        the latest ive seen is about 1.08 for 1998
        1.28 to 1.30 for 1999

        P/e for 1998 is
        P/e for 1999 is about 11

        Rest of s&p 500 is
        about 24

        FAIR value for Cendant is around 28 a
        Im measuring that two ways..
        first by price to
        earnings to be equal with its peers.
        And second..before
        the merger both were trading around 18 a share. Or a
        combined value of around 36.
        We now know 50% to 60% or
        so of CUC was bogus so basically take half off of
        their 18..making that nine.
        HFS is take
        their 18..and the 9 CUC is worth..That puts us at 27.
        So..both these measurements put us in the same
        Discount some for the fear factor..and this range is still
        way overdone.
        Remember..we have double audited
        books coming out also.So the numbers should be

        Cendant has better high growth products than sunbeam..and
        more diversity..

        The 14 range to me seems like
        a pretty dam good bet for a bottom.
        It may
        bounce around there..little lower..and higher..but I
        think it will find support at that