I had analyzed sulzer here. I had written the following
Sulzer has tried to delist the company in the past and current holds 80% of the stock. I will have to stretch my imagination on the point, that the company will suddenly start looking at improving the returns for the minority shareholder. In such a scenario, it is quite difficult to put an appropriate number on the intrinsic or fair value of the company.
Well, one part of the comment came through – the company announced delisting yesterday. I had also written that it is difficult to put an appropriate number on the fair value. That did not stop me from evaluating the stock. I have uploaded a detailed analysis here.
I typically use this spreadsheet to do a detailed analysis of a company to ensure that I am evaluating the company from all aspects (I need to get a life !!)
My fair value estimate of the company is between 1250-1300 and it remains to be seen if the stock will appreciate still further in response to the delisting offer. You can read the guest post by ninad on the delisting framework here.
I have been building a position in this stock for quite some time now and have built a 60% position ( I am too slow !!). I am definitely pleased with this outcome. The stock however is now a delisting play and my approach will be different. It is likely I may exit the stock if the price approaches my estimate of fair value
An offer to my broker
I recently opened a new account and have a new broker. The broker is quite good and provides me good service. To appreciate the business he gets, he has been sending me 4 line stock recommendations. For ex: One of the recent recommendations was Tata motors.
I could not believe that someone would buy a stock based on a 4 line recommendation – apparently quite a few do. I think people do more research when buying a pressure cooker than a stock !
My offer to my broker is (in jest) – if you don’t give me advise and don’t send me recommendations, I will give you 1% extra commission on my trades