Post #50 by kelbon on the Falling Knives board

Investment Strategies / Falling Knives

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All this said, if ZIM can generate even a few more quarters close to the last few, and if they keep paying out half of their net income in dividends, at a market cap of $2b, it wouldn't take long for a bet on ZIM to work out nicely.

Chances are ZIM in not going to generate a few more quarters close to the last few, at least according the consensus of analysts that follow the company. Here's some data:

Quarterly analysts' earnings estimate:
Dec 2022
3.59

Quarterly reported earnings:
Sep 2022
9.66

Jun 2022
11.07

Mar 2022
14.19

Dec 2021
14.17

Annual analysts' earnings estimates:
Dec 2022
38.19

Dec 2023
2.91

Dec 2024
-3.34

ZIM really is a falling knife as far as future earnings are concerned. If however, someone believes that analysts' estimates are wrong and they have a good reason to think so, then backing up the truck will make sense to them. Otherwise, however cheap a company's shares may seem based on one year's earnings that is not a signal, in my opinion, to buy in the face of the expectation of negative earnings two years out.

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