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Originally Posted by coordi
And they are up 100% in the last 3-4 months. You are expecting another 300% in the next 10?
You should consider what Ahnuld has to say on the subject. He is actually a professional
It doesn't matter that it was up 100 percent over the last three months. An investment decision is like selling something to yourself. If you have the right standards then the result you achieve will not be based on luck. Good management is about removing the objections to the investment decision so that there is a strong interest in the stock and the value of the company appreciates.
Of course, debt matters but the context of the debt also matters. It would be like a bank that makes a bunch of bad loans and then has a huge hole in the balance sheet. This situation is like a bank that made a lot of high-quality loans and owns them as assets that offset the liabilities of the money it has borrowed. If Meredith has to pay 30 million in interest to buy assets that are earning 200 million then who cares. They are growing revenue in most segments and the assets are becoming more valuable as a result. They are creating new licensing opportunities with their new brands for products that are sold in stores. The more they do to find ways to generate income from those brands that add value for customers the more those brands generate in revenue and the more they are worth to a potential buyer.
I think management coming out of covid should stop trying to please people that are too worried about the debt. It's like the people that keep alluding that they need to reinstate the dividend. They should tell the analysts to **** off on those two things and take the matter of share appreciation into their own hands.
They know they can easily service the debt and because covid is almost certainly going to be over as a serious threat pretty soon then the debt doesn't matter as a threat to the financial stability of the company. They should focus on the share price today. If I were them I would start buying back shares aggressively to avoid people trying to take control too cheaply at the expense of all the other shareholders. It would be unfair if a buyer comes in at 32 a share when it should be at 50 a share if the market actually understood the business. The truth is this market isn't interested in investing really. It's all gambling now.
With all due respect to ahnuld, he's wrong. I concede to arguments not reputations.