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Wal-mart Stores Inc: $WMT Cash Flow Valuation Update http://goo.gl/D7fmN
Mar 28, 2012
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Texas Instruments Inc: $TXN Cash Flow Valuation Update http://goo.gl/gMz0T
Mar 26, 2012
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Molson Coors Brewing Co: $TAP Cash Flow Valuation Update http://goo.gl/c1q7H
Mar 26, 2012
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Eric Cota on Harris Corporation: Cash Flow Valuation Q: What do you get as true value if you decreas...
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Wal-mart Stores Inc: Cash Flow Valuation Update
Projected Yield: ~ 2.60%
Wal-Mart is the largest retailer in the world with more than $400 billion in annual revenue and fast approaching 10,000 stores across the globe. The company mainly operates supercenters, followed by wholesale warehouse clubs and also is testing a smaller store format for urban areas, which the company has yet to penetrate.
Estimated WACC for the firm today is 6.09% using the Capital Asset Pricing Model and the company's recent SEC filings.
Recent free cash flows and noted growth rates:
Average Annual Growth FCF: ~ 26%
CAGR FCF: ~ 15%
Consensus Forecast Industry 5-Year Growth: ~ 14% per year
Consensus Forecast Company 5-Year Growth: ~ 9% per year
Internal Growth Rate: ~ 6%
Sustainable Growth Rate: ~ 18%
Scenario 1
Discounted Cash Flow Valuation
The firm's future cash flows, discounted at a WACC of 6.09%, give a present value for the entire firm (Debt + Equity) of $278429 million. If the firm's fair value of debt is estimated at $53043 million, then the fair value of the firm's equity could be $225386 million. $225386 million / 3430 million outstanding shares is approximately $66 per share and a 20% margin of safety is $53/share.
Scenario 2
All else being equal,
Discounted Cash Flow Valuation
Sources
Morningstar.com
Yahoo! Finance
Walmartstores.com
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Texas Instruments Inc: Cash Flow Valuation Update
Projected Yield: ~ 2.04%
Dallas-based Texas Instruments generates about 96% of its revenue from semiconductors and 4% from its well-known calculators. TI is the world's largest maker of analog chips, which are used to process real-world signals, such as sound and power. TI also has a leading market share position in digital signal processors, used in wireless communications, and has a growing mobile processor business line that is used to run software and applications in many popular smartphones and tablets.
Estimated WACC for the firm today is 11.92% using the Capital Asset Pricing Model and the company's recent SEC filings.
Recent free cash flows and noted growth rates:
Average Annual Growth FCF: ~ 24%
CAGR FCF: ~ 8%
Consensus Forecast Industry 5-Year Growth: ~ 15% per year
Consensus Forecast Company 5-Year Growth: ~ 7% per year
Internal Growth Rate: ~ 10%
Sustainable Growth Rate: ~ 17%
Scenario 1
Average FCF (2011, 2010, 2009) is $2317 million
Discounted Cash Flow Valuation
The firm's future cash flows, discounted at a WACC of 11.92%, give a present value for the entire firm (Debt + Equity) of $26748 million. If the firm's fair value of debt is estimated at $4600 million, then the fair value of the firm's equity could be $22148 million. $22148 million / 1140 million outstanding shares is approximately $19 per share and a 20% margin of safety is $15/share.
Scenario 2
All else being equal,
Discounted Cash Flow Valuation
Sources
Morningstar.com
Yahoo! Finance
Texas Instruments
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Molson Coors Brewing Co: Cash Flow Valuation Update
Projected Yield: ~ 2.91%
Molson Coors is one of the largest brewers in the world. Major brands include Coors Light, Molson Canadian, Carling, Miller Lite, Keystone, Blue Moon and Leinenkugel's. Its largest markets include Canada, the United States, and the United Kingdom. Molson Coors retains 40% share of the Canadian beer market, 29% of the U.S. beer market (via its MillerCoors joint venture with SABMiller), and 19% of the U.K. beer market.
Estimated WACC for the firm today is 7.82% using the Capital Asset Pricing Model and the company's recent SEC filings.
Recent free cash flows and noted growth rates:
CAGR FCF ex-2002: ~ 10%
Consensus Forecast Industry 5-Year Growth: ~ 13% per year
Consensus Forecast Company 5-Year Growth: ~ 7% per year
Internal Growth Rate: ~ 4%
Sustainable Growth Rate: ~ 6%
Scenario 1
Discounted Cash Flow Valuation
The firm's future cash flows, discounted at a WACC of 7.82%, give a present value for the entire firm (Debt + Equity) of $11426 million. If the firm's fair value of debt is estimated at $2178 million, then the fair value of the firm's equity could be $9248 million. $9248 million / 181 million outstanding shares is approximately $51 per share and a 20% margin of safety is $41/share.
Scenario 2
All else being equal,
Discounted Cash Flow Valuation
Scenario 3
All else being equal,
Discounted Cash Flow Valuation
Sources
Morningstar.com
Yahoo! Finance
Molson Coors Brewing Co.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.