And Newbridge is in a strong position financially: it bought at around 1.6 times net book value when the shares are trading at 4.5 times.
Somebody must have raised some money at some time in the past, as the 7 million in net book value of property on the assets side is matched mainly by net worth and an unsecured note of 1.5 million.
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His formula involves adding two main variables: the dealership's assets minus overall debt (also called "net tangible book value"), plus what Hall calls the "blue sky" value, equal to the dealer's pretax income times some multiple between one and six, depending on the health of the operation.
The stock's multiples of earnings, cash flow (in the sense of net plus depreciation) and book value all stand at discounts to their respective five-year averages.
Snowling ticks off other advantages for Sallie: low interest rate risk (given government guarantees), profit growth expectations in the 15% range, a rich return on equity (net income divided by average book value) of 38%, and a cheap valuation relative to history and the broader market.
The first of our three stock screens selected companies in the Worldscope database whose prices today are at historically low multiples of earnings, cash flow (in the sense of net income plus depreciation) and book value.
The shares have climbed more than 35% since, yet still trade at a discount of 23% to book value, the difference, or net worth, between its assets and its liabilities.
Berkshire's book value per share the measure of net worth that Mr. Buffett prefers as a yardstick to earnings, which he views as too volatile and subject to the whims of accounting rule makers increased 14% in 2012.
Now at 30% of revenue, 90% of book value, 7 times 2009 earnings and 3 times cash flow (in the sense of net income plus depreciation), and with a 3.6% dividend yield, it's too cheap to pass up.
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