cshfool wrote:Hi M&M -
Yes correct I mean the Phil Oakley book, which I'm working through, partly based on your useful notes here. A very interesting read, though there do seem to be some slightly annoying typo/ inconsistencies for the forensically inclined reader seeking to do their own sums, eg compare the Doms 2015 change in working capital pg 45 of 6.4 with the 2015 change in working capital of 10.7 pg 52- the issue seems to be the 4.4 provisions. Despite that he gets the same bottom line Cash from operations of 80.4 so some typos going on, possibly to do with the publication process. Nevertheless some good stuff here as far as I can tell, and an interesting and new voice.
I was previously impressed by Phils identification of Carillion (see Investors Chronicle, March 10, 2017) as a value trap likely to implement a substantial cut in its dividend based on FCF, doubtful EPS growth through acquisition, pension liabilities etc. prior to final implosion. I identified CLLN as a sell here based on my own meagre workings from other directions, (with a gang of shorting hedge funds admittedly) but its nice to find another thinking black sheep.
Check out Terrys "Fundsmith" site and some of his vids at his annual backslap, his "Accounting for growth" book is worth a look too.
thanks for your worked contributions (the detailed calculations are helpful) and for pointing to this book,
Remember my initial suspicion of Phil's method of reducing FCFF with only net interest charges to arrive at FCFE? Where upon he then divides by number of shares in order to reach FCFps.
Do it Phil's way, and get 12.37p per share for DOMs as of their y/e of 2015.
MorningStar, however, would have you believe, it's actually 10p for this period...http://financials.morningstar.com/ratio ... ture=en-US
So I took the -16.3M repayment cost which Phil doesn't mention, and the +5.7M new borrowings, and netted them together then
punched this new data in my spreadsheet, and lo and behold I too arrive at 10p FCFps. I'm started to find I've been shortchanged by Phils review of Cash flow, if you'll pardon the pun..