tag:blogger.com,1999:blog-7294165939647321702.post8549242582376281095..comments2024-03-28T13:45:43.362-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Bye, OremSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7294165939647321702.post-79101613543257515942021-03-02T14:49:56.054-05:002021-03-02T14:49:56.054-05:00Thanks, Spaced. AFCC is definitely paying out at a...Thanks, Spaced. AFCC is definitely paying out at a good clip, but I don't see a discount there that excites me enough to get involved. Operations are practically nil, so I don't see these payout events as sustainable either.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-74592382700443177402021-03-02T09:14:29.008-05:002021-03-02T09:14:29.008-05:00Your views on this align with mine with respect to...Your views on this align with mine with respect to cash. Most companies have a liquidity runway which is a combination of the cash on hand, their available credit under their credit facility, and the potential for further credit based on assets or business prospects. At all times, businesses can make elections about how long this runway should be by either expanding their credit facility, growing their assets, or improving their business prospects. Another way businesses can expand their liquidity prospects is by stopping the return of free cash flows to shareholders, e.g., dividend reduction/elimination or stoppages to share buybacks. <br /><br />My mind wanders to January 2020. Say you're a restaurant, cinema, hotel, or gym. Your revenue is about to go to 0 for months, yet you have vendor bills, utility bills, rent, payroll, and all other varieties of obligations. If you'd spent the prior 5-6 years taking every dollar of free cash flow and returning it to shareholders via dividend or buyback, you'd be at the lender's mercy in every way. This is precisely what happened to company after company. Thankfully, the banking system extended credit to folks, the government acted rationally, and so on. <br /><br />But some companies were swimming in cash way beyond their business growth needs. And they would be fairly subject to criticism for behaving suboptimally.<br /><br />At the end of the day, retaining excess cash and not returning it to the owners is, in effect, like purchasing a business interruption insurance policy. The premium paid for that policy is, in essence, the opportunity cost of the company's decision to hoard the cash, i.e., the shareholders would forfeit any return on those hypothetical dividends they never received. <br /><br />This is a very tricky problem. A company like Berkshire hoards cash for different reasons than a company like Apple. <br /><br />All that said, one can't go around living life in fear of once-in-a-century pandemics.<br />Amithttps://www.blogger.com/profile/14091469112051377984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-36397089635604578022021-03-02T04:31:38.713-05:002021-03-02T04:31:38.713-05:00Hey Barel ,
Check out ticker AFCC
Recently made a...Hey Barel ,<br />Check out ticker AFCC<br />Recently made a substantial issuer bid for 33% of shares in 1.6-1.65 range(iCEO voted in favour without rendering his shares)<br />Cash balance post repurchase 33 mn <br />Insider just upped his stake in December from 7 to 17%<br />Did I mention an eligible dividend for 17 cents?<br />Disclosure:longSPACED OUT GUY!https://www.blogger.com/profile/01663407462513668270noreply@blogger.com