Foster’s has rejected a $2 billion private equity bid for its wine business, saying it “significantly undervalues” the Treasury Wine Estates. Roger Montgomery observed “It’s a very tough business with low barriers to entry, very low barriers to imitation and there’s a huge amount of choice… They will use a large portion of debt to make the acquisition so they only need very small improvements in earnings before interest and tax in order to generate very large returns on the equity that’s actually invested and that’s because of the leverage they use. Read transcript.
Roger Montgomery's popular value investing guide book for the stock market shares his tightly-protected stock investing rules for long-term value investing that you must follow to reproduce his excellent stock market returns.
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