In my journey, I am dealing with my 'style' of investing.
My laziness and mediocrity make me reach for simple things.
The preferred stock of Samsung Electronics which is actually a differential voting stock, currently trades at KRW 165000.
The implied market cap based on this is approx $785 B (1$ = 1350KRW)
The imagined cash on books for the most recent quarter ended should be approx $180 B
Last Q PAT is approx $ 80 B ; Cash flows will be higher because of the long term contracts they are entering.
One might think that full year profits can cross $300 B.
i.e. 2x PE
The common stock trades at a 30% premium; which is still 2.5x PE
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The flipside is simple: This is cyclical and will soon make losses :)
I believe that the flipside is currently the consensus trade, and therein lies the opportunity.
If it spins out its foundry, would it be valued at $250B + ?
And what are the rulers of the company protecting against? Inheritance tax? Windfall tax?
Do they have interesting equity stakes in Anthropic, Mistral, etc?
Fun times.
Title credit goes to Yogi Berra
