Ann: Company update and diversification strategy, page-14

Yes, both very fair comments and i probably should have mentioned the dividend issue in my prior comment. I suspect dividends are quite a long way off as far as MCE goes because they'll need to reinvest in working capital if/when the business gets its legs back so it's not as big an issue in this particular case, but it's generally an important consideration. A back-of-envelope DCF would, of course, capture this better than a TV formula alone.

And certainly agree on cash in the EV calculation - the bigger the net cash balance as % of EV, the more i'd be inclined to apply a discount to it in general. Funnily enough, just this week i've been buying a textbook example of this issue in action - a stock with ~50% of its EV in cash/liquid investments, and the other ~50% of its EV in a consistently profitable/cash-generative business trading at ~3x bottom-of-cycle EBIT. I basically did exactly what you're suggesting as far as the net cash goes - i applied to it a haircut at 10% increments from 0% to 60% (based on my assumption of what return the cash will earn as a % of my cost of capital) such that in the 60% haircut scenario the net cash comprised only ~20% of EV and therefore ~80% EV was in the profitable business, and in that scenario the profitable business was trading at more like a 4.5x bottom-of-cycle EBIT (still cheap enough for me to buy...but only just...and then i chastised myself aloud for buying such crud).