Buffett said that he likes to thumb though Moody’s Manuals and Value-Lines without looking at the price of the company.
You are sitting today in the library worried about central banks running their printing presses while flipping through your Value-Line when you see this
A company with $5.50 in after-tax free cash-flow. Sales and cash flows have grown about 9% over the past 10 years and are estimated to continue growing 6% over the next few years. Debt is 15% of total capital. Ret. On total capital has averaged 14.5% over the past ten years; return on equity has been 15% on average. R&D is 16.5% of sales (above average for its industry). Dividend yield is 4.4% and 42% of net profits. This company is considered one of the strongest in its industry and one of the top companies in the world–well-diversified internationally by geography and product type.
What would you pay per share ball park for this business? Take no more than 33 seconds.
18 responses to “What would you pay?”