Intrinsic value of ONEX Corporation Subordinate Voting Shar - ONEX

Previous Close

$95.45

  Intrinsic Value

$840.43

stock screener

  Rating & Target

str. buy

+780%

Previous close

$95.45

 
Intrinsic value

$840.43

 
Up/down potential

+780%

 
Rating

str. buy

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

We calculate the intrinsic value of ONEX 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 9.7

 

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, %
  14.44
  47.90
  43.61
  39.75
  36.27
  33.15
  30.33
  27.80
  25.52
  23.47
  21.62
  19.96
  18.46
  17.12
  15.90
  14.81
  13.83
  12.95
  12.15
  11.44
  10.80
  10.22
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.25
  7.02
Revenue, $m
  30,430
  45,006
  64,633
  90,324
  123,088
  163,888
  213,599
  272,976
  342,637
  423,044
  514,507
  617,194
  731,144
  856,288
  992,477
  1,139,504
  1,297,129
  1,465,100
  1,643,176
  1,831,140
  2,028,814
  2,236,070
  2,452,837
  2,679,103
  2,914,923
  3,160,417
  3,415,772
  3,681,239
  3,957,134
  4,243,834
  4,541,779
Variable operating expenses, $m
 
  39,687
  56,453
  78,400
  106,390
  141,244
  183,710
  234,434
  293,943
  362,632
  440,766
  527,249
  624,592
  731,499
  847,841
  973,441
  1,108,095
  1,251,587
  1,403,711
  1,564,282
  1,733,149
  1,910,201
  2,095,378
  2,288,669
  2,490,123
  2,699,840
  2,917,981
  3,144,761
  3,380,449
  3,625,368
  3,879,893
Fixed operating expenses, $m
 
  4,029
  4,130
  4,233
  4,339
  4,448
  4,559
  4,673
  4,790
  4,909
  5,032
  5,158
  5,287
  5,419
  5,554
  5,693
  5,836
  5,981
  6,131
  6,284
  6,441
  6,602
  6,767
  6,937
  7,110
  7,288
  7,470
  7,657
  7,848
  8,044
  8,246
Total operating expenses, $m
  31,063
  43,716
  60,583
  82,633
  110,729
  145,692
  188,269
  239,107
  298,733
  367,541
  445,798
  532,407
  629,879
  736,918
  853,395
  979,134
  1,113,931
  1,257,568
  1,409,842
  1,570,566
  1,739,590
  1,916,803
  2,102,145
  2,295,606
  2,497,233
  2,707,128
  2,925,451
  3,152,418
  3,388,297
  3,633,412
  3,888,139
Operating income, $m
  -632
  1,290
  4,050
  7,690
  12,359
  18,197
  25,330
  33,869
  43,904
  55,503
  68,709
  84,788
  101,265
  119,370
  139,082
  160,370
  183,199
  207,532
  233,334
  260,573
  289,223
  319,266
  350,691
  383,497
  417,690
  453,289
  490,320
  528,821
  568,836
  610,422
  653,641
EBITDA, $m
  1,067
  3,987
  7,382
  11,854
  17,584
  24,742
  33,485
  43,947
  56,237
  70,438
  86,606
  104,769
  124,936
  147,093
  171,214
  197,261
  225,193
  254,964
  286,531
  319,856
  354,906
  391,659
  430,102
  470,232
  512,060
  555,607
  600,906
  648,001
  696,948
  747,816
  800,681
Interest expense (income), $m
  1,302
  1,429
  2,112
  3,600
  5,548
  8,031
  11,124
  14,893
  19,394
  24,675
  30,770
  37,704
  45,488
  54,126
  63,613
  73,937
  85,082
  97,031
  109,765
  123,264
  137,513
  152,498
  168,209
  184,641
  201,794
  219,671
  238,281
  257,638
  277,762
  298,677
  320,411
Earnings before tax, $m
  -632
  -139
  1,937
  4,090
  6,812
  10,165
  14,206
  18,977
  24,510
  30,828
  37,939
  47,084
  55,777
  65,244
  75,469
  86,433
  98,116
  110,500
  123,569
  137,309
  151,711
  166,769
  182,482
  198,855
  215,896
  233,618
  252,039
  271,182
  291,074
  311,745
  333,230
Tax expense, $m
  62
  0
  523
  1,104
  1,839
  2,745
  3,836
  5,124
  6,618
  8,324
  10,244
  12,713
  15,060
  17,616
  20,377
  23,337
  26,491
  29,835
  33,364
  37,073
  40,962
  45,028
  49,270
  53,691
  58,292
  63,077
  68,051
  73,219
  78,590
  84,171
  89,972
Net income, $m
  -176
  -139
  1,414
  2,986
  4,973
  7,421
  10,370
  13,853
  17,893
  22,504
  27,696
  34,371
  40,717
  47,628
  55,093
  63,096
  71,625
  80,665
  90,205
  100,236
  110,749
  121,741
  133,212
  145,164
  157,604
  170,541
  183,989
  197,963
  212,484
  227,574
  243,258

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,411
  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
  57,979
  80,656
  115,830
  161,871
  220,588
  293,706
  382,793
  489,205
  614,045
  758,143
  922,056
  1,106,083
  1,310,294
  1,534,566
  1,778,633
  2,042,122
  2,324,604
  2,625,627
  2,944,759
  3,281,612
  3,635,867
  4,007,294
  4,395,764
  4,801,259
  5,223,875
  5,663,829
  6,121,454
  6,597,202
  7,091,637
  7,605,438
  8,139,389
Adjusted assets (=assets-cash), $m
  54,568
  80,656
  115,830
  161,871
  220,588
  293,706
  382,793
  489,205
  614,045
  758,143
  922,056
  1,106,083
  1,310,294
  1,534,566
  1,778,633
  2,042,122
  2,324,604
  2,625,627
  2,944,759
  3,281,612
  3,635,867
  4,007,294
  4,395,764
  4,801,259
  5,223,875
  5,663,829
  6,121,454
  6,597,202
  7,091,637
  7,605,438
  8,139,389
Revenue / Adjusted assets
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
Average production assets, $m
  15,777
  23,313
  33,480
  46,788
  63,760
  84,894
  110,644
  141,402
  177,486
  219,137
  266,515
  319,707
  378,733
  443,557
  514,103
  590,263
  671,913
  758,922
  851,165
  948,530
  1,050,926
  1,158,284
  1,270,569
  1,387,775
  1,509,930
  1,637,096
  1,769,370
  1,906,882
  2,049,795
  2,198,306
  2,352,641
Working capital, $m
  4,917
  3,105
  4,460
  6,232
  8,493
  11,308
  14,738
  18,835
  23,642
  29,190
  35,501
  42,586
  50,449
  59,084
  68,481
  78,626
  89,502
  101,092
  113,379
  126,349
  139,988
  154,289
  169,246
  184,858
  201,130
  218,069
  235,688
  254,005
  273,042
  292,825
  313,383
Total debt, $m
  30,994
  44,943
  76,600
  118,037
  170,883
  236,689
  316,867
  412,638
  524,994
  654,682
  802,204
  967,828
  1,151,617
  1,353,463
  1,573,123
  1,810,263
  2,064,496
  2,335,418
  2,622,636
  2,925,804
  3,244,634
  3,578,918
  3,928,541
  4,293,486
  4,673,841
  5,069,799
  5,481,662
  5,909,835
  6,354,826
  6,817,247
  7,297,803
Total liabilities, $m
  58,641
  72,590
  104,247
  145,684
  198,530
  264,336
  344,514
  440,285
  552,641
  682,329
  829,851
  995,475
  1,179,264
  1,381,110
  1,600,770
  1,837,910
  2,092,143
  2,363,065
  2,650,283
  2,953,451
  3,272,281
  3,606,565
  3,956,188
  4,321,133
  4,701,488
  5,097,446
  5,509,309
  5,937,482
  6,382,473
  6,844,894
  7,325,450
Total equity, $m
  -662
  8,066
  11,583
  16,187
  22,059
  29,371
  38,279
  48,921
  61,405
  75,814
  92,206
  110,608
  131,029
  153,457
  177,863
  204,212
  232,460
  262,563
  294,476
  328,161
  363,587
  400,729
  439,576
  480,126
  522,388
  566,383
  612,145
  659,720
  709,164
  760,544
  813,939
Total liabilities and equity, $m
  57,979
  80,656
  115,830
  161,871
  220,589
  293,707
  382,793
  489,206
  614,046
  758,143
  922,057
  1,106,083
  1,310,293
  1,534,567
  1,778,633
  2,042,122
  2,324,603
  2,625,628
  2,944,759
  3,281,612
  3,635,868
  4,007,294
  4,395,764
  4,801,259
  5,223,876
  5,663,829
  6,121,454
  6,597,202
  7,091,637
  7,605,438
  8,139,389
Debt-to-equity ratio
  -46.819
  5.570
  6.610
  7.290
  7.750
  8.060
  8.280
  8.430
  8.550
  8.640
  8.700
  8.750
  8.790
  8.820
  8.840
  8.860
  8.880
  8.890
  8.910
  8.920
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
Adjusted equity ratio
  -0.075
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -176
  -139
  1,414
  2,986
  4,973
  7,421
  10,370
  13,853
  17,893
  22,504
  27,696
  34,371
  40,717
  47,628
  55,093
  63,096
  71,625
  80,665
  90,205
  100,236
  110,749
  121,741
  133,212
  145,164
  157,604
  170,541
  183,989
  197,963
  212,484
  227,574
  243,258
Depreciation, amort., depletion, $m
  1,699
  2,697
  3,332
  4,164
  5,224
  6,545
  8,155
  10,077
  12,332
  14,936
  17,897
  19,982
  23,671
  27,722
  32,131
  36,891
  41,995
  47,433
  53,198
  59,283
  65,683
  72,393
  79,411
  86,736
  94,371
  102,318
  110,586
  119,180
  128,112
  137,394
  147,040
Funds from operations, $m
  2,022
  2,558
  4,746
  7,150
  10,197
  13,966
  18,525
  23,930
  30,225
  37,440
  45,592
  54,353
  64,388
  75,351
  87,224
  99,988
  113,619
  128,098
  143,403
  159,519
  176,432
  194,134
  212,623
  231,900
  251,975
  272,860
  294,574
  317,143
  340,596
  364,968
  390,298
Change in working capital, $m
  -561
  1,006
  1,354
  1,773
  2,261
  2,815
  3,430
  4,097
  4,807
  5,548
  6,311
  7,085
  7,863
  8,635
  9,397
  10,145
  10,876
  11,590
  12,287
  12,970
  13,640
  14,301
  14,957
  15,612
  16,272
  16,939
  17,619
  18,317
  19,037
  19,782
  20,558
Cash from operations, $m
  2,583
  1,552
  3,392
  5,377
  7,936
  11,151
  15,095
  19,833
  25,418
  31,892
  39,281
  47,268
  56,525
  66,716
  77,827
  89,843
  102,743
  116,508
  131,116
  146,549
  162,792
  179,833
  197,666
  216,288
  235,703
  255,921
  276,955
  298,826
  321,559
  345,185
  369,740
Maintenance CAPEX, $m
  0
  -986
  -1,457
  -2,092
  -2,924
  -3,985
  -5,306
  -6,915
  -8,838
  -11,093
  -13,696
  -16,657
  -19,982
  -23,671
  -27,722
  -32,131
  -36,891
  -41,995
  -47,433
  -53,198
  -59,283
  -65,683
  -72,393
  -79,411
  -86,736
  -94,371
  -102,318
  -110,586
  -119,180
  -128,112
  -137,394
New CAPEX, $m
  -769
  -7,536
  -10,167
  -13,308
  -16,972
  -21,134
  -25,750
  -30,758
  -36,084
  -41,651
  -47,378
  -53,192
  -59,026
  -64,825
  -70,546
  -76,160
  -81,650
  -87,009
  -92,243
  -97,365
  -102,395
  -107,359
  -112,285
  -117,206
  -122,155
  -127,166
  -132,274
  -137,512
  -142,914
  -148,511
  -154,335
Cash from investing activities, $m
  -3,784
  -8,522
  -11,624
  -15,400
  -19,896
  -25,119
  -31,056
  -37,673
  -44,922
  -52,744
  -61,074
  -69,849
  -79,008
  -88,496
  -98,268
  -108,291
  -118,541
  -129,004
  -139,676
  -150,563
  -161,678
  -173,042
  -184,678
  -196,617
  -208,891
  -221,537
  -234,592
  -248,098
  -262,094
  -276,623
  -291,729
Free cash flow, $m
  -1,201
  -6,970
  -8,232
  -10,024
  -11,960
  -13,968
  -15,961
  -17,840
  -19,503
  -20,852
  -21,793
  -22,581
  -22,482
  -21,780
  -20,441
  -18,449
  -15,798
  -12,496
  -8,560
  -4,014
  1,114
  6,792
  12,988
  19,671
  26,812
  34,384
  42,363
  50,728
  59,466
  68,562
  78,011
Issuance/(repayment) of debt, $m
  1,706
  14,542
  31,657
  41,437
  52,846
  65,806
  80,178
  95,771
  112,356
  129,688
  147,522
  165,624
  183,789
  201,846
  219,660
  237,140
  254,233
  270,921
  287,219
  303,168
  318,830
  334,284
  349,623
  364,945
  380,355
  395,958
  411,863
  428,173
  444,992
  462,421
  480,556
Issuance/(repurchase) of shares, $m
  -315
  11,684
  2,103
  1,618
  899
  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  
  1,175
  26,226
  33,760
  43,055
  53,745
  65,806
  80,178
  95,771
  112,356
  129,688
  147,522
  165,624
  183,789
  201,846
  219,660
  237,140
  254,233
  270,921
  287,219
  303,168
  318,830
  334,284
  349,623
  364,945
  380,355
  395,958
  411,863
  428,173
  444,992
  462,421
  480,556
Total cash flow (excl. dividends), $m
  -47
  19,257
  25,528
  33,032
  41,785
  51,838
  64,217
  77,931
  92,853
  108,837
  125,729
  143,043
  161,307
  180,066
  199,219
  218,692
  238,436
  258,425
  278,659
  299,154
  319,943
  341,076
  362,611
  384,617
  407,167
  430,342
  454,225
  478,901
  504,458
  530,983
  558,566
Retained Cash Flow (-), $m
  442
  -11,684
  -3,517
  -4,604
  -5,872
  -7,312
  -8,909
  -10,641
  -12,484
  -14,410
  -16,391
  -18,403
  -20,421
  -22,427
  -24,407
  -26,349
  -28,248
  -30,102
  -31,913
  -33,685
  -35,426
  -37,143
  -38,847
  -40,549
  -42,262
  -43,995
  -45,763
  -47,575
  -49,444
  -51,380
  -53,395
Prev. year cash balance distribution, $m
 
  2,818
  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
 
  10,390
  22,010
  28,428
  35,913
  44,526
  55,309
  67,290
  80,369
  94,427
  109,338
  124,640
  140,886
  157,639
  174,812
  192,343
  210,187
  228,323
  246,746
  265,468
  284,518
  303,933
  323,764
  344,067
  364,906
  386,347
  408,463
  431,326
  455,014
  479,603
  505,171
Discount rate, %
 
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.71
  24.89
  26.14
  27.44
  28.81
  30.25
  31.77
  33.36
  35.02
  36.77
  38.61
  40.54
  42.57
  44.70
  46.93
  49.28
  51.75
  54.33
PV of cash for distribution, $m
 
  9,179
  16,978
  18,911
  20,334
  21,159
  21,731
  21,517
  20,567
  18,998
  16,971
  14,631
  12,246
  9,922
  7,783
  5,909
  4,341
  3,084
  2,118
  1,405
  899
  555
  330
  188
  103
  54
  27
  13
  6
  3
  1
Current shareholders' claim on cash, %
  100
  50.0
  39.7
  34.8
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0
  33.0

Onex Corporation is a private equity company. Its segments include Electronics Manufacturing Services, including Celestica Inc. that provides electronics manufacturing services; Healthcare Imaging, including Carestream Health, Inc. that provides healthcare information technology solutions; Health and Human Services, including Res-Care, Inc. that provides residential, educational and support services; Building Products, including JELD-WEN Holding, Inc. that manufactures windows and related products; Insurance Services, including USI Insurance Services and York Risk Services Holding Corp.; Packaging Products and Services, including SGS International, LLC and SIG Combibloc Group Holdings S.a r.l.; Business and Information Services, including Clarivate Analytics and Emerald Expositions, LLC; Food Retail and Restaurants, including Jack's Family Restaurants and Save-A-Lot; Credit Strategies, including Onex Credit Manager, and Other, including Survitec Group Limited.

FINANCIAL RATIOS  of  ONEX Corporation Subordinate Voting Shar (ONEX)

Valuation Ratios
P/E Ratio -55.8
Price to Sales 0.3
Price to Book -14.8
Price to Tangible Book
Price to Cash Flow 3.8
Price to Free Cash Flow 5.4
Growth Rates
Sales Growth Rate 14.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.1%
Cap. Spend. - 3 Yr. Gr. Rate 0.1%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity -4592.3%
Total Debt to Equity -4681.9%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.4%
Ret/ On Assets - 3 Yr. Avg. 1.7%
Return On Total Capital -0.6%
Ret/ On T. Cap. - 3 Yr. Avg. -1.7%
Return On Equity 39.9%
Return On Equity - 3 Yr. Avg. -50%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 30%
Gross Margin - 3 Yr. Avg. 29.5%
EBITDA Margin 7.8%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -2.1%
Oper. Margin - 3 Yr. Avg. -3.4%
Pre-Tax Margin -2.1%
Pre-Tax Margin - 3 Yr. Avg. -3.4%
Net Profit Margin -0.6%
Net Profit Margin - 3 Yr. Avg. -1.4%
Effective Tax Rate -9.8%
Eff/ Tax Rate - 3 Yr. Avg. -11.3%
Payout Ratio -15.3%

ONEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ONEX stock intrinsic value calculation we used $30430 million for the last fiscal year's total revenue generated by ONEX Corporation Subordinate Voting Shar. The default revenue input number comes from 2016 income statement of ONEX Corporation Subordinate Voting Shar. 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 ONEX stock valuation model: a) initial revenue growth rate of 47.9% 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 13.2%, whose default value for ONEX is calculated based on our internal credit rating of ONEX Corporation Subordinate Voting Shar, 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 ONEX Corporation Subordinate Voting Shar.
    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 ONEX stock the variable cost ratio is equal to 89.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3931 million in the base year in the intrinsic value calculation for ONEX 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 4.7% for ONEX Corporation Subordinate Voting Shar.

Corporate tax rate of 27% is the nominal tax rate for ONEX Corporation Subordinate Voting Shar. 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 ONEX 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 ONEX are equal to 51.8%.

Life of production assets of 16 years is the average useful life of capital assets used in ONEX Corporation Subordinate Voting Shar 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 ONEX is equal to 6.9%. 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 - $-662 million for ONEX Corporation Subordinate Voting Shar - 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 101.674 million for ONEX Corporation Subordinate Voting Shar 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 ONEX Corporation Subordinate Voting Shar at the current share price and the inputted number of shares is $9.7 billion.

RELATED COMPANIES Price Int.Val. Rating
IFP Interfor Corpo 20.45 2.26  str.sell
Financial statements of ONEX
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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