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The Mirandolan

XLV 24 December 2024 · Research The Economics of Active Management In his paper, “The Nature of the Firm”, Ronald Coase proposed that firms exist because there are transaction costs to organising economic activity through the price mechanism such…
XLIV 15 October 2024 · Research Nucor, Executive Compensation and Dividends Nucor Corporation (NUE: $152/share) is a stock I discovered while studying CMC. Like CMC, its executive compensation aligns shareholder and management interests. It has the added advantage of… Closed 4 Apr 2025 · −31.3%
XLIII 9 October 2024 · Research Steel Your Portfolio With CMC CMC (CMC: $52/share), formerly known as the Commercial Metals Company, has a history of profitable growth, thanks to its competitive advantages, the alignment of shareholder and management interests… Closed 4 Apr 2025 · −21.24%
XLII 4 September 2024 · Research Diamond Hill is Undervalued Regardless of Challenges to its Growth and Profitability I published an update on this investment thesis on 23 December 2024 on SumZero. Opened on the 4th of September 2024, the position was closed on the 31st… Closed 31 Mar 2025 · −6.56%
XLI 15 August 2024 · Research Meta Platforms: Its Economics and Valuation Amidst a global stock sell-off, Meta Platforms' Q2 earnings proved an excellent redoubt, reminding investors of the firm’s remarkable growth and profitability. If Mark Zuckerberg’s present dalliance with…
XL 15 July 2024 · Research Competition, Equity Preference and the Decade Ahead for the S&P 500 Using a model I built to forecast 10-year S&P 500 total returns leads to an awful number: 1.16%, the average total returns that are likely, if the predictive…
XXXIX 14 July 2024 · Method Economic Book Value: An Estimate of a Stock’s Intrinsic Value Superficially, a valuation methodology exists to help an investor estimate, within a reasonable range, how much something is worth. Investing, however, is not merely an intellectual exercise. The…
XXXVIII 14 July 2024 · Method The Weighted Average Cost of Capital (WACC) An investment is a choice to foregore present consumption in favour of future consumption, in exchange for which the investor is given a return which can simply be…
XXXVII 5 June 2024 · Method Free Cash Flow (FCF) and FCF Yield Free cash flow (FCF) is the cash that is available to all investors, whether debt holders or shareholders, after taxes have been paid. This is the after-tax cash…
XXXVI 5 June 2024 · Method Invested Capital Invested capital is the accumulation of investments that have been made into a business’ core operations, in order to earn NOPAT. As with NOPAT, I calculate invested capital…
XXXV 5 June 2024 · Method Net Operating Profit After Tax (NOPAT) Annual reports are not merely long, and complex, with often abstruse language that seems calculated to befuddle the reader, they are also structured in ways that unintentionally disguise…
XXXIV 8 May 2024 · Method Unconsolidated Subsidiary Assets, a Valuation Adjustment Where the unconsolidated subsidiary’s income is disclosed, I consider that income as operating and add it to my calculation of the parent company’s NOPAT, and invested capital and…
XXXIII 8 May 2024 · Method Excess Cash, a Valuation Adjustment As excess cash is not needed for operations, it can be distributed to shareholders, and so, I add it to my calculation of economic book value (EBV). In…
XXXII 8 May 2024 · Method Discontinued Operations, a Valuation Adjustment When it comes to estimating economic book value (EBV), one can say that the logic of discontinued operations is that, if businesses are held for sale, the cash…
XXXI 8 May 2024 · Method Deferred Compensation Assets and Liabilities, a Valuation Adjustment Although deferred compensation agreements create a liability for a business, that business may not match that liability with requisite assets. Deferred compensation assets are netted against deferred compensation…
XXX 8 May 2024 · Method Net Deferred Tax Assets and Liabilities, a Valuation Adjustment In my calculation of economic book value (EBV), I deduct DTLs, net of DTAs because they are real obligations that will have to be paid in future, reducing…
XXIX 8 May 2024 · Method Pension Net Funded Status, a Valuation Adjustment As I discussed in “Overfunded Pension Plan Assets, an Invested Capital Adjustment”, under SFAS 158, companies are obliged to report the net funded status of their pensions, which…
XXVIII 8 May 2024 · Method Adjusted Total Debt, a Valuation Adjustment The adjusted total debt of a firm is the sum of the fair value of all its short and long-term obligations, on-balance sheet and off-balance sheet. For example,…
XXVII 8 May 2024 · Method Non-Controlling Interests, a Valuation Adjustment The fair value of non-controlling interest liability is subtracted from shareholder value in my reverse discounted cash flow (DCF) models to reflect the reality that non-controlling interests have…
XXVI 8 May 2024 · Method Preferred Stock, a Valuation Adjustment Preferred stock is a form of hybrid financing that has the qualities of both equity and debt. In terms of claims on assets and cash flows, preferred stock…