John Chen's questions to MIL leadership • Q2 2015
Question
John Chen from Brereton Value Capital asked for the analysis supporting the bank acquisition over a share buyback, sought clarification on how to assess the company's true earning power, and inquired about the composition of 'equity method investments' on the balance sheet.
Answer
CEO Gerardo Cortina and CFO Sam Morrow justified prioritizing the bank acquisition by emphasizing the long-term goal of improving profit margins through new trade finance services, which requires capital. They advised focusing on net income and return on equity over cash flow for performance assessment. CEO Cortina then detailed the equity method investments, which include stakes in the Pea Ridge mine, Chinese eye care clinics, and a quartz quarry in Spain.