Preston Pysche, Toby Carlisle, Hari Ramchandra discussed on We Study Billionaires - The Investors Podcast
Sin. My name is Preston pysche and were accompanied by our good friends. Toby Carlisle and Hari Ramchandra guys. Welcome back to the show. Great to have you here. I know I always really look forward to these mastermind discussion. So we're thrilled to have you back script to be here. Thank you. We all sent out our picks for this quarters mastermind discussion. Do we have any volunteers to go? I I know we always the beat over who's gonna go first, but anyone who's really excited to talk about their pick. I'm definitely not excited about mon-. But I'll take a swing at it. Because you guys a warm up and get nastier as we go along. So while while everybody's sort of still little bit nervous about the start of the co let me let me do Mon Mon HP Q HP the printing business of the oh combined entity before it spun out. So I bought this post spin in two thousand sixteen something like that. And it was trading for about eleven bucks. And that's. Twenty two dollars. So it's up a lot. And I haven't seen it for years for a couple of years, and it sort of flooded back into my screen. So I think it's kind of it's interesting thirty all billion dollar market cap price settings currently about six point eight which is shaped IHOP q-. It's been hired. It's been low the reason that it's a little bit cheaper this and compression and their EPS. So it's likely that had freed twenty-five next year. It's going to be low than that throwing plenty of free cash flow paying a dividend buying back stock just one of the reasons that I like this business, I think that the have a good attitude toward shareholders. So they do buy back stock that do pay dividends. And I think that you're gonna get a lot of the return out of this stock from shell the friendly maneuvers like that twelve percent of the return of the lesser uses come from those returns of capital, whether it be dividend ship back, and I think that will continue on because it seems to be throwing cash, and it seems to be doing pretty well frost settings at six point eight say is below the five year ever. Wjr. And at a pretty substantial discount to every stock in the index, and it certainly below where it was lost year in the before. So head some compression in the stock price as well. You know, many of their concerns about it. Pretty simple estate one of them is that it's carrying more debt than I would ordinarily hitch to you guys. So the balance sheet is a little bit weak. Then I typically like to see, and there's also there's just bowling that balance sheet, the book valley doesn't tell you quite how bad it is. Because some of that book value was goodwill. And so it looks like it's about a six hundred million dollar negative book value sort of six point six billion dollars of that includes some amid the six point six billion dollars that includes goodwill and other things that I wouldn't really count on the positive side of do think that it's pretty steady is this the risks just general sort of macro risks at something really nasty happens in the economy. But I think he's been around for a long time. They making princes hardware stuff that nobody really wants to be in any more. But I think that this is kind of a muddle. For a business. It'll just keep muddling through and you'll get I don't have great hopes for the returns. But I think that you can sort of make eight ten percent over the next five years because I think the valuation stocks currently trading at twenty two dollars a seat valuations around thirty five dollars, even assuming a little bit of demonstration in the UK going backwards for a little bit here. I just think it's too cheap. Where it is. I think that's about a fifty percent upside muddled for business with this sort of looking off the shells with the proviso that the balance sheets a little bit wake. And if we really say some nasty macro than have to revisit it..