I did do a little more research on RIMG. They just made a significant acquistion, buying a firm called Qumu. The total cost was about $50m. That is for a firm with about $15m in annual revenues and they were silent about profit. That seems really expensive to me. I always worry when the purchase price is a function of revenues rather than EBIDTA. So I will be taking a pass on them.
I will still be selling AXS, and will put some $ into FCX and RTN. But I will keep some powder dry as I consider the next big thing to buy.
Commentary and Tracking of a Portfolio of Stocks using approach from "The Little Book that Beats the Market" by Joel Greenblatt aka Magic Formula Investing
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- Marsh_Gerda
- If you believe that you should not trust anyone over 30, then you should not trust me. I have lived in three different countries, have been married for 15+ years and have 4 great kids.
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2012
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January
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- Apple of My Eye?
- January 27th 2011 Tracking Portfolio
- MFI Monthly Tracking Portfolio Jan 28 2011
- What Happened?
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- Paying Dividends
- When to Sell?
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- Great Week
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- Top 200 List January 13th 2012
- Saturday Morning Thoughts
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- Trying for Some Separation
- RIMG Update
- Dividend Portfolio: Rebalance?
- Top 200 List January 6th 2011
- Analysis of Stocks from 1 Year Ago
- Another Brick in the Wall
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3 comments:
I was part of an offer to buy part of a company that was based on revenue and the accountant for one of the sides of the deal said it is common for the purchase price to be 3-5 times revenue. I too struggled with not using profit but there were a number of reasons given way to involved to go into detail here. Bottom line, I would not be as concerned about it. I just find it shocking that after a 2 minute look at the Yahoo numbers, RIMG is a $12 stock, making a profit with $11 a share cash on hand, no debt and a significant dividend.
What am I missing?
Good question. They no longer have that much in cash as they spent about $50m buying the smaller company in Nov. But they still have about $6 a share in cash.
I figured that cash number might be pre purchase. Did not have the time to research it any further. Hoping to do so soon at some point. Thanks.
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