Intrinsic value of Boyd Group Income Fund - BYD-UN

Previous Close

$100.89

  Intrinsic Value

$301.25

stock screener

  Rating & Target

str. buy

+199%

Previous close

$100.89

 
Intrinsic value

$301.25

 
Up/down potential

+199%

 
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.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.9

 

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
  16.00
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
Revenue, $m
  1,387
  1,609
  1,849
  2,106
  2,380
  2,671
  2,978
  3,301
  3,639
  3,994
  4,364
  4,749
  5,150
  5,568
  6,002
  6,453
  6,922
  7,409
  7,916
  8,442
  8,990
  9,559
  10,152
  10,770
  11,413
  12,084
  12,784
  13,514
  14,276
  15,072
  15,904
Variable operating expenses, $m
 
  1,160
  1,329
  1,511
  1,704
  1,910
  2,126
  2,355
  2,594
  2,844
  3,105
  3,354
  3,638
  3,933
  4,240
  4,558
  4,889
  5,233
  5,591
  5,963
  6,350
  6,752
  7,171
  7,607
  8,062
  8,536
  9,030
  9,546
  10,084
  10,646
  11,234
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
  1,503
  1,681
  1,872
  2,074
  2,289
  2,514
  2,753
  3,002
  3,262
  3,534
  3,794
  4,089
  4,395
  4,713
  5,043
  5,386
  5,743
  6,113
  6,499
  6,899
  7,315
  7,748
  8,198
  8,668
  9,157
  9,667
  10,199
  10,753
  11,332
  11,937
Operating income, $m
  57
  106
  168
  235
  306
  382
  463
  548
  637
  731
  829
  955
  1,062
  1,173
  1,289
  1,410
  1,535
  1,666
  1,802
  1,944
  2,091
  2,244
  2,405
  2,572
  2,746
  2,928
  3,117
  3,316
  3,523
  3,740
  3,968
EBITDA, $m
  91
  152
  218
  288
  364
  444
  529
  619
  713
  812
  916
  1,024
  1,137
  1,254
  1,376
  1,503
  1,636
  1,773
  1,917
  2,066
  2,221
  2,383
  2,552
  2,728
  2,911
  3,103
  3,303
  3,512
  3,730
  3,959
  4,198
Interest expense (income), $m
  9
  8
  11
  14
  18
  22
  26
  30
  34
  39
  44
  49
  55
  60
  66
  72
  78
  85
  92
  99
  106
  114
  122
  130
  139
  148
  157
  167
  177
  188
  199
Earnings before tax, $m
  57
  98
  157
  220
  288
  361
  437
  518
  603
  692
  785
  906
  1,007
  1,113
  1,223
  1,338
  1,457
  1,581
  1,710
  1,845
  1,985
  2,131
  2,283
  2,442
  2,607
  2,780
  2,961
  3,149
  3,347
  3,553
  3,769
Tax expense, $m
  27
  27
  42
  60
  78
  97
  118
  140
  163
  187
  212
  245
  272
  301
  330
  361
  393
  427
  462
  498
  536
  575
  616
  659
  704
  751
  799
  850
  904
  959
  1,018
Net income, $m
  30
  72
  115
  161
  210
  263
  319
  378
  440
  505
  573
  661
  735
  813
  893
  977
  1,064
  1,154
  1,248
  1,347
  1,449
  1,555
  1,666
  1,782
  1,903
  2,029
  2,161
  2,299
  2,443
  2,594
  2,751

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
  793
  912
  1,038
  1,174
  1,317
  1,468
  1,628
  1,795
  1,969
  2,152
  2,342
  2,540
  2,746
  2,960
  3,182
  3,413
  3,653
  3,903
  4,163
  4,433
  4,714
  5,006
  5,311
  5,628
  5,959
  6,304
  6,664
  7,040
  7,432
  7,842
Adjusted assets (=assets-cash), $m
  684
  793
  912
  1,038
  1,174
  1,317
  1,468
  1,628
  1,795
  1,969
  2,152
  2,342
  2,540
  2,746
  2,960
  3,182
  3,413
  3,653
  3,903
  4,163
  4,433
  4,714
  5,006
  5,311
  5,628
  5,959
  6,304
  6,664
  7,040
  7,432
  7,842
Revenue / Adjusted assets
  2.028
  2.029
  2.027
  2.029
  2.027
  2.028
  2.029
  2.028
  2.027
  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
  299
  348
  399
  455
  514
  577
  643
  713
  786
  863
  943
  1,026
  1,113
  1,203
  1,296
  1,394
  1,495
  1,600
  1,710
  1,823
  1,942
  2,065
  2,193
  2,326
  2,465
  2,610
  2,761
  2,919
  3,084
  3,256
  3,435
Working capital, $m
  6
  -35
  -41
  -46
  -52
  -59
  -66
  -73
  -80
  -88
  -96
  -104
  -113
  -122
  -132
  -142
  -152
  -163
  -174
  -186
  -198
  -210
  -223
  -237
  -251
  -266
  -281
  -297
  -314
  -332
  -350
Total debt, $m
  192
  245
  321
  403
  490
  582
  679
  782
  889
  1,001
  1,119
  1,241
  1,368
  1,500
  1,638
  1,781
  1,930
  2,084
  2,245
  2,412
  2,585
  2,766
  2,954
  3,150
  3,354
  3,566
  3,788
  4,020
  4,261
  4,514
  4,777
Total liabilities, $m
  457
  510
  586
  668
  755
  847
  944
  1,047
  1,154
  1,266
  1,384
  1,506
  1,633
  1,765
  1,903
  2,046
  2,195
  2,349
  2,510
  2,677
  2,850
  3,031
  3,219
  3,415
  3,619
  3,831
  4,053
  4,285
  4,526
  4,779
  5,042
Total equity, $m
  281
  283
  325
  371
  419
  470
  524
  581
  641
  703
  768
  836
  907
  980
  1,057
  1,136
  1,219
  1,304
  1,393
  1,486
  1,582
  1,683
  1,787
  1,896
  2,009
  2,127
  2,250
  2,379
  2,513
  2,653
  2,800
Total liabilities and equity, $m
  738
  793
  911
  1,039
  1,174
  1,317
  1,468
  1,628
  1,795
  1,969
  2,152
  2,342
  2,540
  2,745
  2,960
  3,182
  3,414
  3,653
  3,903
  4,163
  4,432
  4,714
  5,006
  5,311
  5,628
  5,958
  6,303
  6,664
  7,039
  7,432
  7,842
Debt-to-equity ratio
  0.683
  0.870
  0.990
  1.090
  1.170
  1.240
  1.300
  1.350
  1.390
  1.420
  1.460
  1.480
  1.510
  1.530
  1.550
  1.570
  1.580
  1.600
  1.610
  1.620
  1.630
  1.640
  1.650
  1.660
  1.670
  1.680
  1.680
  1.690
  1.700
  1.700
  1.710
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
  72
  115
  161
  210
  263
  319
  378
  440
  505
  573
  661
  735
  813
  893
  977
  1,064
  1,154
  1,248
  1,347
  1,449
  1,555
  1,666
  1,782
  1,903
  2,029
  2,161
  2,299
  2,443
  2,594
  2,751
Depreciation, amort., depletion, $m
  34
  46
  50
  54
  58
  62
  66
  71
  76
  81
  86
  69
  75
  81
  87
  94
  100
  107
  115
  122
  130
  139
  147
  156
  165
  175
  185
  196
  207
  218
  231
Funds from operations, $m
  90
  118
  165
  215
  268
  325
  385
  449
  516
  586
  660
  730
  810
  893
  980
  1,070
  1,164
  1,262
  1,363
  1,469
  1,579
  1,694
  1,814
  1,938
  2,069
  2,205
  2,347
  2,495
  2,650
  2,812
  2,982
Change in working capital, $m
  -1
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -18
  -18
Cash from operations, $m
  91
  123
  170
  220
  274
  331
  392
  456
  524
  594
  668
  739
  819
  902
  989
  1,080
  1,174
  1,272
  1,374
  1,481
  1,591
  1,707
  1,827
  1,952
  2,083
  2,219
  2,362
  2,511
  2,667
  2,830
  3,000
Maintenance CAPEX, $m
  0
  -20
  -23
  -27
  -31
  -35
  -39
  -43
  -48
  -53
  -58
  -63
  -69
  -75
  -81
  -87
  -94
  -100
  -107
  -115
  -122
  -130
  -139
  -147
  -156
  -165
  -175
  -185
  -196
  -207
  -218
New CAPEX, $m
  -12
  -49
  -52
  -56
  -59
  -63
  -66
  -70
  -73
  -77
  -80
  -83
  -87
  -90
  -94
  -97
  -101
  -105
  -109
  -114
  -118
  -123
  -128
  -133
  -139
  -145
  -151
  -158
  -165
  -172
  -180
Cash from investing activities, $m
  -118
  -69
  -75
  -83
  -90
  -98
  -105
  -113
  -121
  -130
  -138
  -146
  -156
  -165
  -175
  -184
  -195
  -205
  -216
  -229
  -240
  -253
  -267
  -280
  -295
  -310
  -326
  -343
  -361
  -379
  -398
Free cash flow, $m
  -27
  54
  95
  138
  184
  234
  287
  343
  403
  465
  530
  592
  663
  738
  815
  896
  979
  1,067
  1,158
  1,252
  1,351
  1,453
  1,560
  1,671
  1,788
  1,909
  2,036
  2,168
  2,306
  2,451
  2,602
Issuance/(repayment) of debt, $m
  18
  70
  76
  82
  87
  92
  97
  102
  107
  112
  117
  122
  127
  132
  138
  143
  149
  154
  161
  167
  174
  181
  188
  196
  204
  213
  222
  231
  242
  252
  264
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
  70
  76
  82
  87
  92
  97
  102
  107
  112
  117
  122
  127
  132
  138
  143
  149
  154
  161
  167
  174
  181
  188
  196
  204
  213
  222
  231
  242
  252
  264
Total cash flow (excl. dividends), $m
  -10
  125
  171
  219
  271
  326
  385
  446
  510
  577
  647
  714
  791
  870
  953
  1,039
  1,128
  1,221
  1,318
  1,419
  1,524
  1,634
  1,748
  1,867
  1,992
  2,122
  2,257
  2,399
  2,548
  2,703
  2,866
Retained Cash Flow (-), $m
  -96
  -39
  -42
  -45
  -48
  -51
  -54
  -57
  -60
  -62
  -65
  -68
  -71
  -74
  -76
  -79
  -83
  -86
  -89
  -93
  -96
  -100
  -104
  -109
  -113
  -118
  -123
  -129
  -134
  -140
  -146
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
 
  122
  128
  174
  223
  275
  330
  389
  450
  515
  582
  646
  720
  796
  876
  959
  1,046
  1,135
  1,229
  1,326
  1,428
  1,534
  1,644
  1,759
  1,878
  2,004
  2,134
  2,271
  2,414
  2,563
  2,719
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
 
  117
  118
  152
  184
  213
  240
  263
  281
  296
  305
  307
  307
  303
  294
  282
  266
  247
  226
  204
  181
  159
  136
  115
  96
  78
  62
  49
  37
  28
  20
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 61.4
Price to Sales 1.3
Price to Book 6.6
Price to Tangible Book
Price to Cash Flow 20.3
Price to Free Cash Flow 23.3
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 16% 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 21.6%.

Life of production assets of 14.9 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 18.622 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 $1.9 billion.

RELATED COMPANIES Price Int.Val. Rating
Financial statements of BYD-UN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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