How to Value a Stock - Terry Smith

요약 보기

잉여현금흐름수익률(FCF yield)과 성장률을 더해 기대수익률을 추정하는 방법을 설명. FCF yield가 국채 수익률 이상이면 장기적으로 괜찮다고 봄. S&P500은 장기 약 9% 복리 성장. 시장이 비이성적으로 싸질 때 기회가 온다는 점(마이크로소프트 12% FCF yield 사례)과 72의 법칙을 설명.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. term which you often use Which is less well known to some investors is free cash flow yield yeah what is a free cash flow yield and how do you measure it as in when is it too low and when is it attractive yeah okay free cash flow what is it first of all okay free cash flow is the cash that a company generates and what it's got left over after paying for everything it could do whatever it wants with that it could pay all out to investors it could uh invest in the business the latees of Peter BKE from Bank of Scotland I once said look I think we'll put it in a room and look at it or they can buy their own shares back couldn't they yeah you buy their own shares back so it's it's it belongs to the shareholders and the company can dispose of it in any combination of those ways that they want we try to Value companies by taking that free cash flow and dividing it by the market value of the company to get a yield that we can can then compare with the yield on bonds bank accounts etc etc and we're looking for in a company is one where a combination of that free cash flow yield so if the free cash flow yield divided by the the market value comes out at 3 or 4% go okay that's fine we then compare it with a couple of other things to see where we're going one of them we compare them with is government bonds what's yield on government bonds because after all government bonds are a safe investment apparently well allegedly if we can buy very high quality companies on a a free cash flow yield that is the same as or more than the yield on government bonds will probably be all right in the long term and the reason I say that is pretty simple the coupon on the Government Bond doesn't grow over time whereas our our free cash flow from our companies will grow over time unless we've got something seriously wrong and so that's kind of the bottom line is the free cash flow yield the same as or more than the Government Bond because if it is we're providing we can take the time to sit here and wait we're probably going to be okay that's quite an important qualification the other thing we do is in terms of trying to work out what our total return might be is we have a guess at the growth rate in that free cash flow over time what will it grow at over time and my team are quite good at trying to sort of guesstimate that over about a four or five year time Horizon why four or five years just it's a period we found by experiment that they're quite good over getting it at um partly because they're very good at it um they are partly because these are quite predictable businesses and so we take that growth rate over the next four or five years and we add it to the free cash flow y one of the rule of thumbs in investment is if you take the yield on something and you add the growth rate you get the estimated return if nothing else changes which of course is rubbish because something always changes but it doesn't matter so if you take uh you know the earnings yield on a company which is the inverse of it PE and you had the growth rate you should get to the the return so if we've got 3 or 4% free cash flow yield and we think we're growing at about 8% then I think my expected return on that portfolio is about 12% perom just add the two together it's a rule of thumb so over a 10-year period for a patient investor that's that's a very handsome return Isn't it sure is I mean over the very long term 50 years the S&P 500 has compounded at about 9% so if we can beat That by 2 or 3% that's pretty good I think um now we hope to do better than that but the means of doing better than that are are one of several things one of them is from time to time I don't know why the market goes completely mad and offers us an opportunity to buy something very cheaply we bought Microsoft on a 12% free cash flow yield that shouldn't exist it's so bizarrely cheap that Julian and I had to sort of lie down in a dark r with a towel on her head and think what have we missed and the answer was nothing at all but it doesn't occasionally those come along and they they give you that opportunity or another example for you idex that we own which is the veterinary diagnostic equipment company ran into two things at once one is it changed from Wholesale Distributors to going direct vets which disrupted its sales its cash flows and the Sequoia fund which is his biggest shareholder had a meltdown because of its um uh investment in Valiant pharmaceutical and had big redemptions had to sell his holding so we got this opportunity to buy it very cheaply it went up 100% perom for the next few years but you don't get very many of those markets are not that inefficient so I would say that sort of 12% number that I've just named you is very good compared with the long run but we'd hope that opportunity will rise and we'll grasp it to better that so 12% compounded over o over 10 years that's a that's almost doubling your money over over six years it is yeah people people get this wrong because six years will double your money at 12% 612 is a 72 y it doubles your money over six years the rule of 72 the rule of 72 yes it's a an arithmetic rule for working out compound interest basically one of the simplest questions is if you make 10% per anom how long does it take to double your money and of course with simple interest where the interest isn't added to the principle each year and it earns interest with simple interest the answer is 10% them 10 years but of course with compound interest it's not because at the end of of year one you'll have 110 and 10% on 110 get you to 121 right and so on and so forth a quick way to do it is to divide the rate of interest that you're going to achieve into the number 72 and that will tell you how long it takes to double your money so if it is 10% per adom you will double your money in just over 7 years if it's 6% perom since six six goes into 72 12 times you 6% perom you would oh sorry 12 % prom divide into 72 you will double your money in 6 years basically so actually the opposite of that is if inflation was at 7.2% you'd have your money over 10 years yes you would yes oh that's terrifying that might well be the future it could be yes yeah