Author Topic: ADS - Alliance Data Systems  (Read 27352 times)

LowIQinvestor

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Re: ADS - Alliance Data Systems
« Reply #190 on: Today at 08:55:33 AM »
I went back over the last 10 years to see various valuation metrics ( PE, Cashflow multiple, P/S, EV/EBITDA )

ADS is currently trading at or below on nearly every metric than it did in the 2008-2009 great recession!


Hope they are buying back shares right now. This is silly


frommi

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Re: ADS - Alliance Data Systems
« Reply #191 on: Today at 09:22:50 AM »
I went back over the last 10 years to see various valuation metrics ( PE, Cashflow multiple, P/S, EV/EBITDA )

ADS is currently trading at or below on nearly every metric than it did in the 2008-2009 great recession!


Hope they are buying back shares right now. This is silly

Lowest P/E was 5 in 2008/2009 and P/B 2.88. Thats around 120$, so still 30% downside.

brycepeterson

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Re: ADS - Alliance Data Systems
« Reply #192 on: Today at 09:47:33 AM »
Categorically it's easy to see ADS is cheap today - the whole short-term voting machine of the market has taken it & many other financials down in '18.  My guess is over course of 2019 earnings will prove stable and, with buybacks, will hover back to $200-$275.  One caveat is if you price-in consumer-led recession.  Example - today's 6% reserving in "normal economy" (per mgmt) goes to wherever you think is necessary (8%-10%?) - that would put shares lower - but some of that is being priced-in here ($175-$180). 

My comment is to just be careful using "historical multiples" from abnormal periods.  Comment above mine references 5 PE in '08-'09 and $120 floor (I don't know if 5 PE is true...taking word for it).  Late 2008 to early 2009 was a highly unusual stock price environment, when businesses were trading dirt cheap, thus I would not use that time period as a useful "floor."  Likewise, if analyzing Microsoft or Cisco today, I wouldn't use late 1990's tech bubble multiples to justify a ceiling (unless you're a "financial advisor" trying to earn commission - joking).