Intrinsic value of Boyd Group Income Fund - BYD-UN

Previous Close

$105.06

  Intrinsic Value

$240.03

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  Rating & Target

str. buy

+128%

Previous close

$105.06

 
Intrinsic value

$240.03

 
Up/down potential

+128%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BYD-UN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Boyd Group Income Fund (BYD-UN) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  18.14
  13.60
  12.74
  11.97
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
Revenue, $m
  1,387
  1,576
  1,776
  1,989
  2,213
  2,449
  2,695
  2,953
  3,222
  3,503
  3,795
  4,098
  4,414
  4,742
  5,082
  5,437
  5,805
  6,187
  6,585
  7,000
  7,431
  7,880
  8,348
  8,837
  9,346
  9,877
  10,432
  11,012
  11,617
  12,250
  12,913
Variable operating expenses, $m
 
  1,136
  1,278
  1,428
  1,586
  1,753
  1,927
  2,109
  2,299
  2,497
  2,704
  2,895
  3,118
  3,349
  3,590
  3,840
  4,100
  4,370
  4,652
  4,944
  5,249
  5,566
  5,897
  6,242
  6,601
  6,977
  7,369
  7,778
  8,206
  8,653
  9,121
Fixed operating expenses, $m
 
  343
  352
  361
  370
  379
  388
  398
  408
  418
  429
  440
  451
  462
  473
  485
  497
  510
  522
  536
  549
  563
  577
  591
  606
  621
  637
  653
  669
  686
  703
Total operating expenses, $m
  1,330
  1,479
  1,630
  1,789
  1,956
  2,132
  2,315
  2,507
  2,707
  2,915
  3,133
  3,335
  3,569
  3,811
  4,063
  4,325
  4,597
  4,880
  5,174
  5,480
  5,798
  6,129
  6,474
  6,833
  7,207
  7,598
  8,006
  8,431
  8,875
  9,339
  9,824
Operating income, $m
  57
  96
  147
  200
  257
  317
  380
  446
  515
  587
  662
  764
  846
  931
  1,019
  1,111
  1,207
  1,307
  1,411
  1,520
  1,633
  1,751
  1,875
  2,004
  2,139
  2,279
  2,427
  2,581
  2,743
  2,912
  3,089
EBITDA, $m
  91
  139
  192
  248
  308
  371
  437
  506
  579
  654
  733
  815
  901
  990
  1,083
  1,180
  1,280
  1,385
  1,494
  1,608
  1,727
  1,850
  1,980
  2,115
  2,256
  2,403
  2,558
  2,719
  2,889
  3,066
  3,251
Interest expense (income), $m
  9
  8
  10
  13
  16
  19
  22
  26
  30
  33
  37
  41
  46
  50
  54
  59
  64
  69
  75
  80
  86
  92
  98
  105
  112
  119
  126
  134
  142
  150
  159
Earnings before tax, $m
  57
  89
  136
  187
  241
  298
  357
  420
  485
  554
  625
  723
  800
  881
  965
  1,052
  1,143
  1,238
  1,337
  1,440
  1,547
  1,659
  1,777
  1,899
  2,027
  2,161
  2,301
  2,447
  2,601
  2,761
  2,930
Tax expense, $m
  27
  24
  37
  51
  65
  80
  97
  113
  131
  150
  169
  195
  216
  238
  260
  284
  309
  334
  361
  389
  418
  448
  480
  513
  547
  583
  621
  661
  702
  746
  791
Net income, $m
  30
  65
  99
  137
  176
  217
  261
  307
  354
  404
  456
  528
  584
  643
  704
  768
  834
  904
  976
  1,051
  1,129
  1,211
  1,297
  1,386
  1,480
  1,577
  1,679
  1,786
  1,898
  2,016
  2,139

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  54
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  738
  777
  876
  981
  1,091
  1,207
  1,329
  1,456
  1,589
  1,727
  1,871
  2,021
  2,176
  2,338
  2,506
  2,681
  2,862
  3,051
  3,247
  3,452
  3,664
  3,886
  4,117
  4,357
  4,608
  4,870
  5,144
  5,430
  5,728
  6,041
  6,367
Adjusted assets (=assets-cash), $m
  684
  777
  876
  981
  1,091
  1,207
  1,329
  1,456
  1,589
  1,727
  1,871
  2,021
  2,176
  2,338
  2,506
  2,681
  2,862
  3,051
  3,247
  3,452
  3,664
  3,886
  4,117
  4,357
  4,608
  4,870
  5,144
  5,430
  5,728
  6,041
  6,367
Revenue / Adjusted assets
  2.028
  2.028
  2.027
  2.028
  2.028
  2.029
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
  2.028
Average production assets, $m
  218
  247
  279
  312
  347
  384
  423
  464
  506
  550
  596
  643
  693
  744
  798
  854
  911
  971
  1,034
  1,099
  1,167
  1,237
  1,311
  1,387
  1,467
  1,551
  1,638
  1,729
  1,824
  1,923
  2,027
Working capital, $m
  6
  -35
  -39
  -44
  -49
  -54
  -59
  -65
  -71
  -77
  -83
  -90
  -97
  -104
  -112
  -120
  -128
  -136
  -145
  -154
  -163
  -173
  -184
  -194
  -206
  -217
  -230
  -242
  -256
  -270
  -284
Total debt, $m
  192
  235
  298
  366
  437
  511
  590
  671
  757
  846
  938
  1,034
  1,134
  1,238
  1,346
  1,459
  1,575
  1,697
  1,823
  1,954
  2,091
  2,234
  2,382
  2,537
  2,698
  2,867
  3,043
  3,226
  3,418
  3,619
  3,829
Total liabilities, $m
  457
  500
  563
  631
  702
  776
  855
  936
  1,022
  1,111
  1,203
  1,299
  1,399
  1,503
  1,611
  1,724
  1,840
  1,962
  2,088
  2,219
  2,356
  2,499
  2,647
  2,802
  2,963
  3,132
  3,308
  3,491
  3,683
  3,884
  4,094
Total equity, $m
  281
  277
  313
  350
  390
  431
  474
  520
  567
  617
  668
  721
  777
  835
  895
  957
  1,022
  1,089
  1,159
  1,232
  1,308
  1,387
  1,470
  1,556
  1,645
  1,739
  1,836
  1,938
  2,045
  2,157
  2,273
Total liabilities and equity, $m
  738
  777
  876
  981
  1,092
  1,207
  1,329
  1,456
  1,589
  1,728
  1,871
  2,020
  2,176
  2,338
  2,506
  2,681
  2,862
  3,051
  3,247
  3,451
  3,664
  3,886
  4,117
  4,358
  4,608
  4,871
  5,144
  5,429
  5,728
  6,041
  6,367
Debt-to-equity ratio
  0.683
  0.850
  0.950
  1.040
  1.120
  1.190
  1.240
  1.290
  1.330
  1.370
  1.400
  1.430
  1.460
  1.480
  1.500
  1.520
  1.540
  1.560
  1.570
  1.590
  1.600
  1.610
  1.620
  1.630
  1.640
  1.650
  1.660
  1.660
  1.670
  1.680
  1.680
Adjusted equity ratio
  0.332
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  30
  65
  99
  137
  176
  217
  261
  307
  354
  404
  456
  528
  584
  643
  704
  768
  834
  904
  976
  1,051
  1,129
  1,211
  1,297
  1,386
  1,480
  1,577
  1,679
  1,786
  1,898
  2,016
  2,139
Depreciation, amort., depletion, $m
  34
  43
  45
  48
  51
  54
  57
  60
  64
  67
  71
  51
  55
  60
  64
  68
  73
  78
  83
  88
  93
  99
  105
  111
  117
  124
  131
  138
  146
  154
  162
Funds from operations, $m
  90
  108
  145
  185
  227
  271
  318
  367
  418
  471
  527
  579
  639
  702
  768
  836
  907
  981
  1,059
  1,139
  1,223
  1,310
  1,402
  1,497
  1,597
  1,701
  1,811
  1,925
  2,044
  2,170
  2,301
Change in working capital, $m
  -1
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
Cash from operations, $m
  91
  112
  149
  189
  232
  276
  323
  372
  424
  478
  534
  586
  646
  710
  776
  844
  915
  990
  1,067
  1,148
  1,232
  1,320
  1,412
  1,508
  1,608
  1,713
  1,823
  1,938
  2,058
  2,184
  2,316
Maintenance CAPEX, $m
  0
  -17
  -20
  -22
  -25
  -28
  -31
  -34
  -37
  -40
  -44
  -48
  -51
  -55
  -60
  -64
  -68
  -73
  -78
  -83
  -88
  -93
  -99
  -105
  -111
  -117
  -124
  -131
  -138
  -146
  -154
New CAPEX, $m
  -12
  -29
  -32
  -33
  -35
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -51
  -53
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -77
  -80
  -83
  -87
  -91
  -95
  -99
  -104
Cash from investing activities, $m
  -118
  -46
  -52
  -55
  -60
  -65
  -70
  -74
  -79
  -84
  -90
  -96
  -101
  -106
  -113
  -120
  -126
  -133
  -141
  -148
  -156
  -164
  -173
  -182
  -191
  -200
  -211
  -222
  -233
  -245
  -258
Free cash flow, $m
  -27
  65
  98
  134
  172
  212
  254
  298
  345
  393
  444
  490
  545
  603
  662
  725
  789
  857
  927
  1,000
  1,077
  1,156
  1,240
  1,326
  1,417
  1,512
  1,612
  1,716
  1,824
  1,938
  2,058
Issuance/(repayment) of debt, $m
  18
  60
  64
  67
  71
  75
  78
  82
  85
  89
  93
  96
  100
  104
  108
  112
  117
  121
  126
  131
  137
  142
  148
  155
  161
  168
  176
  184
  192
  201
  210
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  18
  60
  64
  67
  71
  75
  78
  82
  85
  89
  93
  96
  100
  104
  108
  112
  117
  121
  126
  131
  137
  142
  148
  155
  161
  168
  176
  184
  192
  201
  210
Total cash flow (excl. dividends), $m
  -10
  124
  162
  201
  243
  286
  332
  380
  430
  482
  536
  587
  645
  707
  771
  837
  906
  978
  1,053
  1,132
  1,213
  1,299
  1,388
  1,481
  1,579
  1,681
  1,787
  1,899
  2,016
  2,139
  2,268
Retained Cash Flow (-), $m
  -96
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -86
  -90
  -94
  -98
  -102
  -107
  -111
  -117
Prev. year cash balance distribution, $m
 
  37
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  128
  126
  164
  203
  245
  289
  334
  383
  433
  485
  533
  590
  649
  711
  775
  841
  911
  983
  1,059
  1,137
  1,220
  1,306
  1,395
  1,489
  1,587
  1,690
  1,797
  1,910
  2,028
  2,151
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  123
  116
  142
  167
  190
  209
  226
  239
  249
  254
  253
  252
  247
  239
  227
  214
  198
  181
  163
  145
  126
  108
  91
  76
  62
  49
  39
  30
  22
  16
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Boyd Group Income Fund (the Fund) is an unincorporated, open-ended mutual fund trust. The Fund's primary line of business is automotive collision and glass repair and related services. It operates in automotive collision repair and related services segment. It is engaged in acquiring and holding an interest in The Boyd Group Inc. The Boyd Group Inc.'s business consists of the ownership and operation of autobody/autoglass repair facilities and related services. It operates in approximately five Canadian provinces under the name Boyd Autobody & Glass, as well as in over 20 states of the United States under the name Gerber Collision & Glass. It is a retail auto glass operator in the United States with locations across approximately 30 states of the United States under the names Gerber Collision & Glass, Glass America, Auto Glass Service, Auto Glass Authority and Autoglassonly.com. It also operates Gerber National Claim Services. The Fund operates in Canada and the United States.

FINANCIAL RATIOS  of  Boyd Group Income Fund (BYD-UN)

Valuation Ratios
P/E Ratio 64
Price to Sales 1.4
Price to Book 6.8
Price to Tangible Book
Price to Cash Flow 21.1
Price to Free Cash Flow 24.3
Growth Rates
Sales Growth Rate 18.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 20%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 62.3%
Total Debt to Equity 68.3%
Interest Coverage 7
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 8.8%
Return On Total Capital 6.9%
Ret/ On T. Cap. - 3 Yr. Avg. -1.8%
Return On Equity 12.9%
Return On Equity - 3 Yr. Avg. -4.8%
Asset Turnover 2
Profitability Ratios
Gross Margin 8.9%
Gross Margin - 3 Yr. Avg. 8.6%
EBITDA Margin 7.2%
EBITDA Margin - 3 Yr. Avg. 4.4%
Operating Margin 4.1%
Oper. Margin - 3 Yr. Avg. 1.2%
Pre-Tax Margin 4.1%
Pre-Tax Margin - 3 Yr. Avg. 1.2%
Net Profit Margin 2.2%
Net Profit Margin - 3 Yr. Avg. -0.5%
Effective Tax Rate 47.4%
Eff/ Tax Rate - 3 Yr. Avg. -409.2%
Payout Ratio 30%

BYD-UN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BYD-UN stock intrinsic value calculation we used $1387 million for the last fiscal year's total revenue generated by Boyd Group Income Fund. The default revenue input number comes from 2016 income statement of Boyd Group Income Fund. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BYD-UN stock valuation model: a) initial revenue growth rate of 13.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for BYD-UN is calculated based on our internal credit rating of Boyd Group Income Fund, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Boyd Group Income Fund.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BYD-UN stock the variable cost ratio is equal to 72.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $335 million in the base year in the intrinsic value calculation for BYD-UN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Boyd Group Income Fund.

Corporate tax rate of 27% is the nominal tax rate for Boyd Group Income Fund. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BYD-UN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BYD-UN are equal to 15.7%.

Life of production assets of 12.5 years is the average useful life of capital assets used in Boyd Group Income Fund operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BYD-UN is equal to -2.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $281 million for Boyd Group Income Fund - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 19.526 million for Boyd Group Income Fund is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Boyd Group Income Fund at the current share price and the inputted number of shares is $2.1 billion.

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