compounder businesses
1 statements across 1 episodes · 0 bullish · 1 bearish · 1 people on the record · first statement Feb 17, 2020 by Dan Rasmussen · across every show →
Everything said about compounder businesses, oldest first
Feb 17, 2020 negative
Heavy LBO debt prevents compounding businesses from reinvesting for growth
“Because a firm that has eight X debt to EBITDA, that is taking out all of its excess free cash flow to pay interest, can't reinvest for growth. So why buy a compounder and lever it up? In theory, you should have much higher return opportunities other than payi…”