Nuplex Industries Limited (NPX)
Discount cash flow analysis
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $6.15 | $6.01 | $5.88 | |
| Terminal Growth% | 0 | $6.19 | $6.05 | $5.91 |
| +1% | $6.22 | $6.08 | $5.95 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $3.25 (overvalued by 2.99%) - 12 hours ago
- Scarydog created a new valuation of $4.00 (undervalued by 53.26%) - 3 months ago
- vikx01 created a new valuation of $3.97 (undervalued by 69.66%) - 6 months ago
- GordonGekko created a new valuation of $2.77 (undervalued by 42.78%) - 7 months ago
- GordonGekko created a new valuation of $1.32 (overvalued by 20.48%) - 8 months ago
- Aarkus created a new valuation of $0.49 (undervalued by 16.67%) - 9 months ago
- kaboodle created a new valuation of $0.50 (undervalued by 8.7%) - 9 months ago
- GordonGekko created a new valuation of $0.30 (undervalued by 3.45%) - 11 months ago
- dubio created a new valuation of $0.67 (undervalued by 97.06%) - 11 months ago
- gordonsk created a new valuation of $1.15 (undervalued by 125.49%) - 12 months ago
- GordonGekko created a new valuation of $1.15 (undervalued by 11.65%) - 1 year ago
- GordonGekko created a new valuation of $2.22 (undervalued by 115.53%) - 1 year ago
- GordonGekko created a new valuation of $3.71 (undervalued by 26.19%) - 1 year ago
- KiwiEMH created a new valuation of $3.29 (undervalued by 11.9%) - 1 year ago
- KiwiEMH created a new valuation of $3.79 (overvalued by 0.79%) - 1 year ago
- NZXCrunchBlog created a new valuation of $6.05 (undervalued by 14.15%) - 1 year ago
- KiwiEMH created a new valuation of $6.00 (undervalued by 1.87%) - 1 year ago
- GordonGekko created a new valuation of $6.05 (overvalued by 1.63%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 624 |
| Net Debt (Long-term borrowings less cash): | 350 |
| Equity Value: | 433 |
| Number of Shares Outstanding: | 81,000,000 |
| Calculated value per share: | $6.05 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/11/running-the-numbers-nuplex-npxnz/
Assumptions
Revenue: Reuters aggregates six analysts covering $NPX.NZ and the mean estimates of 2009 and 2010 revenues are NZ$1.658 billion and NZ$1.777 billion respectively. For our analysis we have used NZ$1.625 billion in 2009, NZ$1.725 billion in 2010 and NZ$1.775 billion in 2011.
Profitability: We have used a flat EBITDA margin of 7.5% to 2011. Reuters has $NPX.NZ‘s EBITD margin at 7.5% last year and an average of 7.8% over the last five-years.
Capital Expenditure: We have assumed capital expenditures of NZ$30.0 million per annum moving forward.
Discount Rate: 11.0%. The PwC New Zealand cost of capital report has $NPX.NZ at a WACC of 11.2% with the wider NZ market at 9.5%.
Terminal Growth Rate: 3.0%.
Our analysis incorporates the cash and debt the $NPX.NZ balance sheet – Valuecruncher calculates a net debt number.