Analyzing the Louis Vuitton Buyout of Tiffany Part 4: Enterprise Value
In my network of friends / family / colleagues, I’m most often known as ‘The Investment Guy’.
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Because of this, I’m often asked about the latest trend in investing, whether would it be years ago, gold and silver, the Greek Crash a couple of years ago, or more recently, weed stocks and cryptocurrency.
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A couple weeks ago, we valued the Coty buyout of Kylie Cosmetics at a $1.2 billion valuation.
A couple of weeks ago we started an analysis of Tiffany & Co (TIF) after it announced and agreed to a $16 billion buyout by Louis Vuitton Moet Hennessy (LVMUY).
In Part 1, I did a full preliminary analysis of Tiffany using the preliminary analysis checklist I’ve developed over the last 12+ years.
In Part 2, I explain what all the metrics and terms on the checklist mean and why they’re on the list.
In Part 3, I explained what the cash conversion cycle is and why it’s so important.
Today, I do a full explanation of Enterprise Value…
“If you were to invest in the company (Tiffany) today, the amount you could expect based on the profitability metrics compared to the company size – in this case, enterprise value – is only 1.8% based on free cash flow 4.6% based on operating profit.” One of my quotes from the video below.
Let’s get to it…
Here are some of the things I talked about in the 24-minute video above.
- Explain how to calculate it
- Why it’s so important
- Why I used a modified version of Enterprise Value
- And more…
This video is part of the IloveValueInvesting Podcast. You can listen to this episode and our others in this podcast by going here.
If you have any questions at this point in the case study, let me know in the comments below so I can answer them in future videos.
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In the next video in this case study we’re going to conclude this mini case study series on Tiffany and talk about final thoughts on the buyout.
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