RE:RE:The Revised Cut's Adjustment to FCF is Very SmallFriend, rationalization is stating random positive words to make one feel better about a situation. I'm curious as to how you value a business?
The way that I was taught to value most businesses is that you do it with a multiple and you do it with your estimate of owner earnings / free cash flow. I've given a line-by-line defense of what I think free cash flow is...that's not rationalization. That's a series of facts that I use to come to that number. If you disagree with any of my assumptions, please confront them head on rather than your unfactual statement. I'm putting this analysis up as a favor to both the longs and the shorts...the longs to see why this is a buy, and the shorts to see if they can find meaningful flaws in the analysis. If the shorts can find an error, then that would reduce owner earnings / free cash flow and get us to a different valuation.
Trying to figure out FCF is the "science" portion of value investing. Trying to figure out the right multiple is the "art," and is subject to a lot more randomness. But I would argue that a mid-single digit multiple is too low compared to where other healthcare names in the market trade. We can have a debate on the multiple. But none of this is rationalization.