That breakup value is based on applying market multiples for the individual divisions to their estimated 2011 net income.
The first key point is that Gabelli assigns market multiples to News Corp.
Rowe Price and BlackRock are awarded above-market multiples of around 20 times earnings.
Resulting Stewart portfolio: companies with strong growth trading at above-market multiples.
Citigroup analysts note that the second part of the buy-in hinged on an agreement to value the remaining 49% stake in NBCUniversal based on market multiples ascribed to competitors.
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Despite signs the ratio is moderating, the bright side is that market multiples are so low right now that further signs of moderation may have little effect on market returns.
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Emerging market investors all know that Russia is trading at the lowest multiples of any emerging market, below 8-times estimated 2012 earnings.
Middle-market purchase-price multiples for LBOs dropped further in the third quarter, averaging 7.2x, down from 8.3x in the second quarter, according to LCD.
Value investors take note: the list of actively traded emerging market stocks trading at low multiples is getting longer.
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If Bernanke is correct in assuming that consumer prices will stay low, the only way Kraft shares could go up would be for the market to assign much higher multiples to lower earnings.
This makes PVH quite fetching: the multiples are below the market average and near the growth rate.
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But, if you modify the forecast up slightly, you can see how the stock can appreciate by multiples of the current market price.
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Applying appropriate trading multiples and transaction multiples derived from the market.
Clearly, the market has awarded ALGN with relatively high multiples because of their growth trajectory, and any threats to growth as noted by Northcoast would likely bring lower multiples.
With liquidity coursing through the leveraged finance market, financing costs are falling while debt multiples are rising.
He says frontier markets now, unusually, trade for lower multiples to earnings than their emerging-market peers.
Some of those stocks havent regained their pre-1974 multiples, even in this long bull market.
The first bear market, from 2000 thru 2002, drastically deflated the sky-high multiples of growth, and particularly technology issues.
On the stock market, the things that needed to be discounted were discounted and the multiples that needed to be compressed were compressed.
"We continue to believe that the private market is way ahead in properly valuing newspaper assets versus current public newspaper multiples, " he wrote.
Contrast all this with mid-teens multiples for major industrials like Caterpillar, Cummins and Boeing where the market anticipates a rebound in revenues with profit margin enhancement.
For example, the market has historically been willing to pay 4.5x to 6.7x multiples of cash earnings, but at the current price the stock trades at a price-to-cash earnings of 7.3x.
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Something has to give as the debt market tightens, Kravis added, and as the cost of capital goes up, multiples come down.
Of course, depending on the economy, market conditions, and company specifics, a given stock might trade above or below those multiples.
By market capitalisation they are among the largest in the world but their shares trade at low multiples, under two times book value and below ten times earnings.
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