In need of some practical advice…
How would you realistically value a company with no industry benchmark? (competitors financials are unavailable)
Say for example, a niche part of the telecoms industry.
-You do however have 5 years of the company’s financials available.
Any advice, especially from Charterholders, would be much appreciated.
Well are you sure you can’t use any public companies as benchmarks? It doesn’t need to a direct competitor, just a similar company.
assuming there really are no public companies that are similar you would just use a DCF. For your beta maybe look a bit broader to get a sense of what other telecoms are, even if they are not similar enough to use for multiples. Or just make your own judgement as to if it’s more or less correlated to the market.
depending on how asset heavy your company is you could also do an NAV as like a liquidation value.
It’s a small telecoms business, turning over around £800,000 per year, so I cannot really compare it to anything public.
thanks, quite interesting.
There’s no comparables in the telecoms business?
Can you find another big telecom company who has potentially ‘carved out’ a similar business line in their financials?