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  • UNKLBRAD UNKLBRAD May 30, 2000 6:36 PM Flag

    What's KSU Worth?

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

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    • 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

      • 1 Reply to mhirschey
      • 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!

 
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