Global Value Investing

[bradford86]

MNI, it's worth more, but i'm not sure that anybody cares.

http://seekingalpha.com/article/1893261-the-mcclatchy-companys-ceo-presents-at-ubs-global-media-and-communications-conference-transcript?part=single

probably getting in at a good time.

$1.5B net debt
$228M OCF/year
$134M interest expense/year

Equity is valued at $257M/year

the debt is likely sustainable... but i'm not sure that the price of the equity is discounted enough for me to bite right now with y and y.wt as cheap as they are.

ev/ebitda here = 6.15 and the breakdown therefore is roughly:

1.51/(1.51+.257)

85% debt 15% equity.

so the question is, yes, this is a levered capital structure.

what is the equity worth here? $800M? And then that would see incremental cash flow to equity holders of roughly $8M/year, thereby increasing the value of equity by $80M/year

so at $257M, you are basically buying into a situation with my debt adjusted yield of roughly 31%

equ year stock net debt
800 2013 $9.26 1.5
880 2014 $10.19 1.4
960 2015 $11.10 1.3
1020 2016 $11.81 1.2
1100 2017 $12.74 1.1
1180 2018 $13.66 1.0
1240 2019 $14.59 0.9

so, $12.74 from $3.00 in 4 years.
and then it is roughly 6 years till the debt/ebitda even gets close to 3.0x

yeah i mean, that is the value, the question is is the market going to see it? if the assumption that the debt is sustainable is right --- then the question becomes at what level in debt/ebitda is the company free to start paying out a dividend?

anyways, so this is an equity/lfcf play of like 2.7x 257/(228-134)

look at ypg. equity = $540M. LFCF = $200M EQ/LFCF = 2.7x

and ypg is debt free in 2-3 years. already has sustainable debt.

so, to me, what you ought to be doing is crystal clear right now sir.