The Beginning... Follow up
Other key points that the article mentioned are:
1. Company Culture is clear. Almost all of the executives from the top ten companies either grew up in the company or have spent a long period in it. Next, companies with a large number of recent acquisitions are having issues creating a single culture like the below eight companies.
PDG with 145% annual sales growth but only 1% above IPO price
BR Malls with 115% annual sales growth but only 23% above IPO price
MRV with 79% annual sales growth but only 5% above IPO price
Cyrela with 62% annual sales growth but only 23% above IPO price
JBS with 51% annual sales growth but only 6% below IPO price
B2W with 50% annual sales growth but only 14% below IPO price
Marfrig with 47% annual sales growth but only 11% below IPO price
Hypermarcas with 46% annual sales growth but only 9% above IPO price
2. Grow abroad but be calm. Do not give up good opportunities abroad but know the risks involved. They mentioned JBS and their acquisition of Swift without significant experience abroad.
3. Low debt to cash creation ratio. I believe that this ratio is a debt to EBITDA or debt to CFO. They go on and mention three companies that are very highly leveraged. Suzano has R$5.7 billion in Debt with a ratio of 4.8 times cash creation. JBS and Marfrig also have increased their leverage greatly these past years to finance their expansion abroad but ultimately ending up owing a lot and profiting a little.
4. Companies need to be faithful to their strategy and fulfill their promises. They mention Hypermarcas and Gol. Hypermarcas raised capital in order to create a portfolio of brands to compete with the sector leaders. After 23 acquisitions in three years, the company is now breaking up their brands in order to be a pharmaceutics company. Their shares have dropped 57% since October 2010. Gol had a strategy to be a low-cost airline and since their acquisition of Varig, their prices have only gone up causing their shares to fall almost 60%.
Above is the Dividend Yield calculations for AES Tiete and for CCR. I am researching the secondary offerings by both these companies. AES Tiete has not done one in a while but CCR did in 2009 and 2010 for what looks to be due to a working capital issue. Need to see why they paid out dividends if they were having a hard time with working capital.
1. Company Culture is clear. Almost all of the executives from the top ten companies either grew up in the company or have spent a long period in it. Next, companies with a large number of recent acquisitions are having issues creating a single culture like the below eight companies.
PDG with 145% annual sales growth but only 1% above IPO price
BR Malls with 115% annual sales growth but only 23% above IPO price
MRV with 79% annual sales growth but only 5% above IPO price
Cyrela with 62% annual sales growth but only 23% above IPO price
JBS with 51% annual sales growth but only 6% below IPO price
B2W with 50% annual sales growth but only 14% below IPO price
Marfrig with 47% annual sales growth but only 11% below IPO price
Hypermarcas with 46% annual sales growth but only 9% above IPO price
2. Grow abroad but be calm. Do not give up good opportunities abroad but know the risks involved. They mentioned JBS and their acquisition of Swift without significant experience abroad.
3. Low debt to cash creation ratio. I believe that this ratio is a debt to EBITDA or debt to CFO. They go on and mention three companies that are very highly leveraged. Suzano has R$5.7 billion in Debt with a ratio of 4.8 times cash creation. JBS and Marfrig also have increased their leverage greatly these past years to finance their expansion abroad but ultimately ending up owing a lot and profiting a little.
4. Companies need to be faithful to their strategy and fulfill their promises. They mention Hypermarcas and Gol. Hypermarcas raised capital in order to create a portfolio of brands to compete with the sector leaders. After 23 acquisitions in three years, the company is now breaking up their brands in order to be a pharmaceutics company. Their shares have dropped 57% since October 2010. Gol had a strategy to be a low-cost airline and since their acquisition of Varig, their prices have only gone up causing their shares to fall almost 60%.
As of 21AUG2012
Above is the Dividend Yield calculations for AES Tiete and for CCR. I am researching the secondary offerings by both these companies. AES Tiete has not done one in a while but CCR did in 2009 and 2010 for what looks to be due to a working capital issue. Need to see why they paid out dividends if they were having a hard time with working capital.
Comments
Post a Comment