$BAYN reported H1 numbers today.
A Thread π§΅π
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The company is happy with a great quarter and it increased its fake earnings guidance
Why fake?
The key here is "special items" which they always deduct from their "core EPS"
A Thread π§΅π
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The company is happy with a great quarter and it increased its fake earnings guidance
Why fake?
The key here is "special items" which they always deduct from their "core EPS"
As an example, this time they had another expense related to, among others, the PCB settlement.
They also had a 1.4 bln revaluation charge on intangible assets due to higher capital market interest rates.
This only means they have a weak asset side of the balance sheet.
They also had a 1.4 bln revaluation charge on intangible assets due to higher capital market interest rates.
This only means they have a weak asset side of the balance sheet.
Over the last decade, they reported 37.9 Bln in "special items".
This is 67% of their 56.3 Bln market cap right now.
Granted, let's say a fourth of this is justified due to R&D amortization from their Healthcare business unit.
Still, this number is mind-blowing.
This is 67% of their 56.3 Bln market cap right now.
Granted, let's say a fourth of this is justified due to R&D amortization from their Healthcare business unit.
Still, this number is mind-blowing.
But hey, these are just earnings.
As the saying goes: CASH is KING πͺ
So how did Free Cash Flow do then according to their own definition?
Beg your pardon, which Free Cash Flow?
As the saying goes: CASH is KING πͺ
So how did Free Cash Flow do then according to their own definition?
Beg your pardon, which Free Cash Flow?
All of this had a material impact on their balance sheet strength
As you can see, the Monsanto acquisition really weakened their balance sheet
At the same time, as you can see 3 tweets back, there was no growth in their own core-EPS after the acquisition.
This is so bad!
As you can see, the Monsanto acquisition really weakened their balance sheet
At the same time, as you can see 3 tweets back, there was no growth in their own core-EPS after the acquisition.
This is so bad!
Ah, and did you know that 32% of the balance sheet is composed of Goodwill?
Mostly again, from Monsanto.
So it's not just that this company is loaded with debt, it's also covering mostly something that management identified as an overpayment of what the assets are worth.
Mostly again, from Monsanto.
So it's not just that this company is loaded with debt, it's also covering mostly something that management identified as an overpayment of what the assets are worth.
So does this mean then that Bayer is the classical example of:
"On the left side of the balance sheet, nothing is right. While on the right side of the balance sheet, nothing is left."
I hope not.
The misery just has to stop one day, don't you think?
"On the left side of the balance sheet, nothing is right. While on the right side of the balance sheet, nothing is left."
I hope not.
The misery just has to stop one day, don't you think?
All of this just leaves me with a very bad taste about how Werner Baumann is managing @Bayer
He's by far the worst European CEO I know of!
And the irony of course is that I still hold my shares, just like @mmarkovic_11 .
We're in it because of Bayer's promise π
#Stupidity
He's by far the worst European CEO I know of!
And the irony of course is that I still hold my shares, just like @mmarkovic_11 .
We're in it because of Bayer's promise π
#Stupidity
So what can I say?
Bayer seems to be the classical example of a value trap.
And the question remains then, how much of this is already priced in?
I believe the most of it, but I'm afraid it might just be wishful thinking.
Bayer seems to be the classical example of a value trap.
And the question remains then, how much of this is already priced in?
I believe the most of it, but I'm afraid it might just be wishful thinking.
Hence, if I can give just one advice:
Avoid this stock. It's not worth it.
Avoid this stock. It's not worth it.
That's it from my side guys!
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