Deep Value Acquirer’s Multiple

This is developed based on Tobias Carlisle’s Deep Value formula for Acquirer’s Multiple. The Acquirer’s Multiple = Enterprise Value / Operating Earnings, where: Enterprise Value= Market Cap + Preferred Equity + Non-Controlling Interests + Total Debt – Cash and Equivalents and, Operating Earnings = Revenue – (Cost of goods sold + Selling, general and administrative costs + Depreciation and amortization) Tobias looks for companies that are: Cheap, At the bottom of their business cycle, Generating lots of cash flow, Have cash in the bank, It’s okay for them to not be ‘great’ companies at the point of investment He also reminds us that a value investor’s advantage is his ability to hold investments over longer terms.

by Ennkay