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Richard Driehaus, who oversees $2.6 billion in assets at Chicago's Driehaus Capital Management, picks Nextel Communications because of the strong operating profits (earnings before interest, taxes, depreciation and amortization) it posted in its September quarter.
At nine times next year's earnings before interest, taxes, depreciation and amortization, it is in line with similar deals over the last decade, according to Barclays Capital.
At 20 times next years EBITDA (earnings before interest, tax, depreciation and amortization), it is quite reasonable.
While it was maintaining it apparent profits and cash flow (also know as EBITDA earnings before interest, taxes, depreciation and amortization), it was doing so only by drawing on more and more capital.
Similar(54)
Its borrowings are barely bigger than one year's earnings before interest, taxes, depreciation and amortization, but it lacks financial discipline.
That's the same as plain old Ebitda — or earnings before interest, taxes, depreciation and amortization — but it subtracts out pension costs and other postretirement employee benefits (health care, basically).
McLeodUSA was losing 9 cents per dollar of revenue (excluding goodwill amortization) when it announced the Splitrock Services buyout.
In a filing announcing its position the fund insisted that Denny's $132 million in 2002 operating income (earnings before interest, taxes, depreciation and amortization) showed it had no debt-service crisis.
"After outperforming its key peer group by 14% over the past six months, Sunoco is currently the most expensive of the refiners in our universe, trading at a lofty 16% premium to the average of the group, on an earnings before interest, taxes, depreciation and amortization basis," it said.
Analysts often focus on cash flow -- or earnings before interest, taxes, depreciation and amortization -- because it measures performance before the effect of interest payments and noncash charges like amortization of good will.
At 8.5 times Virgin Media's projected earnings before interest, taxes, depreciation and amortization for 2013, it is expensive but not out of line with Liberty's own valuation.
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