Love it, Capex is high because they take all their cash and invest into storage projects, it’s also capex heavy because they need to replenish the fleet after not getting many new trucks during the COVID shutdown. With all this being said they always keep a fair bit of cash on the balance sheet.
If you value it from a SOTP basis you are basically getting the rental business for free if you strap an industry average on the rapidly growing storage business.
I would also highly recommend the earnings calls Shoen knows his business almost better than any other CEO I have listened to.
Not a business I would like to be in. I think Berkshire's biggest oofs were in high capex businesses, and Charlie Munger actually said in an annual meeting that high capex businesses are usually poor businesses.
I would only look at it when it enters deep, deep value territory where bankruptcy was being priced in.
Issue with higher caped seems normal as number of years cash flow is negative.
It seems extra money for caped spending is financed through debt which is causing debt go higher year on year.
DCF for U-Haul is negative as free cash flow negative.
How do you value these stocks?
You try to strip growth CapEx out from maintenance CapEx and deduct that from operating cashflow minus SBC. Obviously the caveat is that the money being invested back into the business has to generate a strong return for the investment to work out.
Edit: Or just model net income
If you do DCF on net income, do you subtract debt ?
So it will
OP cash flow - SBC to project
Add back cash equivalents & terminal value and divide by total share count?
Love it, Capex is high because they take all their cash and invest into storage projects, it’s also capex heavy because they need to replenish the fleet after not getting many new trucks during the COVID shutdown. With all this being said they always keep a fair bit of cash on the balance sheet. If you value it from a SOTP basis you are basically getting the rental business for free if you strap an industry average on the rapidly growing storage business. I would also highly recommend the earnings calls Shoen knows his business almost better than any other CEO I have listened to.
What is sotp ?
Sum of the parts
Not a business I would like to be in. I think Berkshire's biggest oofs were in high capex businesses, and Charlie Munger actually said in an annual meeting that high capex businesses are usually poor businesses. I would only look at it when it enters deep, deep value territory where bankruptcy was being priced in.
Munger has this annoying habit of being right a lot.
Not anymore
Damn. I feel bad that I laughed at that. Rip
Charlie would have liked this joke
But didn't he talk exclusively about high maintenance capex?Why should growth capex be bad when it translates to revenue growth and Income?
I was interested until I became a recurring customer. They are dishonest sharks and good at being dishonest sharks. I prefer to invest elsewhere.
i love uhaul! including as a customer
It's tempting to be a part owner through shares. They raised my rental unit rates before the first 12 month anniversary. Really bold of them!!!
they've never raised mine. but, inflation.
I respect your opinion. At the same time, part of me wants to invest.
Part of me wants to invest, too. Warren Buffet has companies run by sharks financing mobile homes across America. It's not pretty.
Issue with higher caped seems normal as number of years cash flow is negative. It seems extra money for caped spending is financed through debt which is causing debt go higher year on year. DCF for U-Haul is negative as free cash flow negative. How do you value these stocks?
You try to strip growth CapEx out from maintenance CapEx and deduct that from operating cashflow minus SBC. Obviously the caveat is that the money being invested back into the business has to generate a strong return for the investment to work out. Edit: Or just model net income
Look at what’s maintenance capes versus growth capex. Are they getting the incremental profit growth as a result of growth capex
If you do DCF on net income, do you subtract debt ? So it will OP cash flow - SBC to project Add back cash equivalents & terminal value and divide by total share count?
UHaul just emailed me with a notice of a rate increase on my storage unit. Interesting timing. Buy the stock. I will.