Efficient Markets?

We recently received market feedback that a commercial landscaper we had looked at ultimately transacted at 16 times adjusted EBITDA with multiple buyers competing to do the deal. I’ll reserve comment on that and simply say that here are 10 of the several hundred U.S. public companies trading at a lower valuation with better margins:

1. Alphabet

2. Berkshire Hathaway

3. Pepsi

4. Caterpillar

5. Disney

6. Nike

7. Starbucks

8. John Deere (shoutout my Gator)

9. 3M

10. Kimberly-Clark

Now, far be it from me to predict which outperform from here, but recall that each of these companies has decades of track record, a well-established market position, scale, redundancy, audited financials, and daily liquidity. So a question to ask yourself is: Would you rather own 16x Landscaping or one of these?

With that, season four is going to take a brief intermission. Have a great weekend and see you in a few.

– Tim

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