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…
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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…
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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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