Intrinsic value of Norbord Inc. - OSB

Previous Close

$42.40

  Intrinsic Value

$2.54

stock screener

  Rating & Target

str. sell

-94%

Previous close

$42.40

 
Intrinsic value

$2.54

 
Up/down potential

-94%

 
Rating

str. sell

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

We calculate the intrinsic value of OSB 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 3.7

 

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, %
  17.02
  27.60
  25.34
  23.31
  21.48
  19.83
  18.35
  17.01
  15.81
  14.73
  13.76
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.23
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
Revenue, $m
  2,386
  3,045
  3,816
  4,705
  5,716
  6,849
  8,106
  9,485
  10,984
  12,602
  14,335
  16,182
  18,138
  20,203
  22,374
  24,649
  27,029
  29,512
  32,100
  34,794
  37,596
  40,508
  43,536
  46,681
  49,950
  53,348
  56,881
  60,556
  64,380
  68,360
  72,506
Variable operating expenses, $m
 
  3,099
  3,885
  4,790
  5,819
  6,973
  8,252
  9,655
  11,182
  12,829
  14,593
  16,473
  18,465
  20,567
  22,776
  25,093
  27,515
  30,043
  32,678
  35,420
  38,272
  41,238
  44,319
  47,522
  50,850
  54,309
  57,905
  61,646
  65,538
  69,591
  73,811
Fixed operating expenses, $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
Total operating expenses, $m
  1,986
  3,099
  3,885
  4,790
  5,819
  6,973
  8,252
  9,655
  11,182
  12,829
  14,593
  16,473
  18,465
  20,567
  22,776
  25,093
  27,515
  30,043
  32,678
  35,420
  38,272
  41,238
  44,319
  47,522
  50,850
  54,309
  57,905
  61,646
  65,538
  69,591
  73,811
Operating income, $m
  400
  -55
  -69
  -85
  -103
  -123
  -146
  -171
  -198
  -227
  -258
  -291
  -326
  -364
  -403
  -444
  -487
  -531
  -578
  -626
  -677
  -729
  -784
  -840
  -899
  -960
  -1,024
  -1,090
  -1,159
  -1,230
  -1,305
EBITDA, $m
  527
  108
  135
  167
  203
  243
  288
  336
  390
  447
  509
  574
  644
  717
  794
  875
  959
  1,047
  1,139
  1,234
  1,334
  1,437
  1,545
  1,656
  1,772
  1,893
  2,018
  2,148
  2,284
  2,425
  2,572
Interest expense (income), $m
  68
  52
  76
  105
  138
  175
  217
  263
  314
  370
  429
  493
  561
  634
  710
  790
  874
  962
  1,054
  1,149
  1,249
  1,352
  1,460
  1,571
  1,687
  1,808
  1,934
  2,064
  2,200
  2,341
  2,488
Earnings before tax, $m
  330
  -107
  -145
  -190
  -241
  -298
  -363
  -434
  -512
  -596
  -687
  -785
  -888
  -997
  -1,113
  -1,234
  -1,361
  -1,493
  -1,631
  -1,775
  -1,925
  -2,081
  -2,243
  -2,412
  -2,587
  -2,768
  -2,957
  -3,154
  -3,358
  -3,571
  -3,793
Tax expense, $m
  83
  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
Net income, $m
  247
  -107
  -145
  -190
  -241
  -298
  -363
  -434
  -512
  -596
  -687
  -785
  -888
  -997
  -1,113
  -1,234
  -1,361
  -1,493
  -1,631
  -1,775
  -1,925
  -2,081
  -2,243
  -2,412
  -2,587
  -2,768
  -2,957
  -3,154
  -3,358
  -3,571
  -3,793

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  218
  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
  2,431
  2,824
  3,540
  4,365
  5,302
  6,354
  7,519
  8,798
  10,189
  11,690
  13,298
  15,011
  16,826
  18,741
  20,755
  22,866
  25,073
  27,377
  29,777
  32,276
  34,875
  37,577
  40,386
  43,304
  46,336
  49,488
  52,766
  56,174
  59,721
  63,414
  67,260
Adjusted assets (=assets-cash), $m
  2,213
  2,824
  3,540
  4,365
  5,302
  6,354
  7,519
  8,798
  10,189
  11,690
  13,298
  15,011
  16,826
  18,741
  20,755
  22,866
  25,073
  27,377
  29,777
  32,276
  34,875
  37,577
  40,386
  43,304
  46,336
  49,488
  52,766
  56,174
  59,721
  63,414
  67,260
Revenue / Adjusted assets
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
  1.078
Average production assets, $m
  880
  1,123
  1,408
  1,736
  2,109
  2,527
  2,991
  3,500
  4,053
  4,650
  5,290
  5,971
  6,693
  7,455
  8,256
  9,096
  9,974
  10,890
  11,845
  12,839
  13,873
  14,948
  16,065
  17,225
  18,432
  19,686
  20,989
  22,345
  23,756
  25,225
  26,755
Working capital, $m
  105
  201
  252
  311
  377
  452
  535
  626
  725
  832
  946
  1,068
  1,197
  1,333
  1,477
  1,627
  1,784
  1,948
  2,119
  2,296
  2,481
  2,674
  2,873
  3,081
  3,297
  3,521
  3,754
  3,997
  4,249
  4,512
  4,785
Total debt, $m
  1,008
  1,158
  1,590
  2,087
  2,652
  3,286
  3,989
  4,760
  5,599
  6,504
  7,474
  8,507
  9,601
  10,756
  11,970
  13,243
  14,574
  15,963
  17,411
  18,918
  20,485
  22,114
  23,807
  25,567
  27,396
  29,296
  31,273
  33,328
  35,467
  37,694
  40,012
Total liabilities, $m
  1,552
  1,703
  2,135
  2,632
  3,197
  3,831
  4,534
  5,305
  6,144
  7,049
  8,019
  9,052
  10,146
  11,301
  12,515
  13,788
  15,119
  16,508
  17,956
  19,463
  21,030
  22,659
  24,352
  26,112
  27,941
  29,841
  31,818
  33,873
  36,012
  38,239
  40,557
Total equity, $m
  878
  1,121
  1,405
  1,733
  2,105
  2,522
  2,985
  3,493
  4,045
  4,641
  5,279
  5,959
  6,680
  7,440
  8,240
  9,078
  9,954
  10,869
  11,822
  12,814
  13,846
  14,918
  16,033
  17,192
  18,395
  19,647
  20,948
  22,301
  23,709
  25,175
  26,702
Total liabilities and equity, $m
  2,430
  2,824
  3,540
  4,365
  5,302
  6,353
  7,519
  8,798
  10,189
  11,690
  13,298
  15,011
  16,826
  18,741
  20,755
  22,866
  25,073
  27,377
  29,778
  32,277
  34,876
  37,577
  40,385
  43,304
  46,336
  49,488
  52,766
  56,174
  59,721
  63,414
  67,259
Debt-to-equity ratio
  1.148
  1.030
  1.130
  1.200
  1.260
  1.300
  1.340
  1.360
  1.380
  1.400
  1.420
  1.430
  1.440
  1.450
  1.450
  1.460
  1.460
  1.470
  1.470
  1.480
  1.480
  1.480
  1.480
  1.490
  1.490
  1.490
  1.490
  1.490
  1.500
  1.500
  1.500
Adjusted equity ratio
  0.298
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  247
  -107
  -145
  -190
  -241
  -298
  -363
  -434
  -512
  -596
  -687
  -785
  -888
  -997
  -1,113
  -1,234
  -1,361
  -1,493
  -1,631
  -1,775
  -1,925
  -2,081
  -2,243
  -2,412
  -2,587
  -2,768
  -2,957
  -3,154
  -3,358
  -3,571
  -3,793
Depreciation, amort., depletion, $m
  127
  163
  204
  252
  306
  366
  433
  507
  587
  674
  767
  865
  970
  1,080
  1,197
  1,318
  1,445
  1,578
  1,717
  1,861
  2,011
  2,166
  2,328
  2,496
  2,671
  2,853
  3,042
  3,238
  3,443
  3,656
  3,877
Funds from operations, $m
  419
  56
  59
  62
  65
  68
  71
  73
  76
  78
  79
  81
  82
  83
  84
  84
  85
  85
  85
  85
  85
  85
  85
  85
  85
  85
  84
  84
  84
  84
  85
Change in working capital, $m
  -4
  43
  51
  59
  67
  75
  83
  91
  99
  107
  114
  122
  129
  136
  143
  150
  157
  164
  171
  178
  185
  192
  200
  208
  216
  224
  233
  243
  252
  263
  274
Cash from operations, $m
  423
  12
  8
  3
  -2
  -7
  -12
  -18
  -23
  -29
  -35
  -41
  -47
  -53
  -59
  -66
  -72
  -79
  -86
  -92
  -100
  -107
  -115
  -123
  -131
  -140
  -149
  -158
  -168
  -178
  -189
Maintenance CAPEX, $m
  0
  -127
  -163
  -204
  -252
  -306
  -366
  -433
  -507
  -587
  -674
  -767
  -865
  -970
  -1,080
  -1,197
  -1,318
  -1,445
  -1,578
  -1,717
  -1,861
  -2,011
  -2,166
  -2,328
  -2,496
  -2,671
  -2,853
  -3,042
  -3,238
  -3,443
  -3,656
New CAPEX, $m
  -136
  -244
  -285
  -328
  -373
  -418
  -464
  -509
  -553
  -597
  -640
  -681
  -722
  -762
  -801
  -840
  -878
  -916
  -955
  -994
  -1,034
  -1,075
  -1,117
  -1,161
  -1,206
  -1,254
  -1,304
  -1,356
  -1,411
  -1,469
  -1,530
Cash from investing activities, $m
  -127
  -371
  -448
  -532
  -625
  -724
  -830
  -942
  -1,060
  -1,184
  -1,314
  -1,448
  -1,587
  -1,732
  -1,881
  -2,037
  -2,196
  -2,361
  -2,533
  -2,711
  -2,895
  -3,086
  -3,283
  -3,489
  -3,702
  -3,925
  -4,157
  -4,398
  -4,649
  -4,912
  -5,186
Free cash flow, $m
  296
  -359
  -439
  -529
  -626
  -731
  -842
  -960
  -1,084
  -1,214
  -1,349
  -1,489
  -1,634
  -1,785
  -1,941
  -2,102
  -2,268
  -2,441
  -2,619
  -2,803
  -2,994
  -3,192
  -3,398
  -3,612
  -3,834
  -4,065
  -4,305
  -4,556
  -4,817
  -5,090
  -5,375
Issuance/(repayment) of debt, $m
  -41
  368
  432
  497
  565
  634
  703
  771
  839
  905
  970
  1,033
  1,095
  1,155
  1,214
  1,273
  1,331
  1,389
  1,448
  1,507
  1,567
  1,629
  1,693
  1,760
  1,829
  1,901
  1,976
  2,055
  2,139
  2,227
  2,319
Issuance/(repurchase) of shares, $m
  5
  350
  429
  517
  613
  716
  826
  942
  1,064
  1,192
  1,326
  1,465
  1,609
  1,758
  1,912
  2,072
  2,237
  2,408
  2,584
  2,767
  2,957
  3,154
  3,358
  3,570
  3,790
  4,020
  4,259
  4,507
  4,767
  5,037
  5,320
Cash from financing (excl. dividends), $m  
  -35
  718
  861
  1,014
  1,178
  1,350
  1,529
  1,713
  1,903
  2,097
  2,296
  2,498
  2,704
  2,913
  3,126
  3,345
  3,568
  3,797
  4,032
  4,274
  4,524
  4,783
  5,051
  5,330
  5,619
  5,921
  6,235
  6,562
  6,906
  7,264
  7,639
Total cash flow (excl. dividends), $m
  240
  359
  421
  486
  552
  619
  686
  753
  819
  884
  947
  1,008
  1,069
  1,128
  1,185
  1,243
  1,299
  1,356
  1,413
  1,471
  1,530
  1,591
  1,653
  1,718
  1,785
  1,856
  1,929
  2,007
  2,088
  2,174
  2,264
Retained Cash Flow (-), $m
  -177
  -350
  -429
  -517
  -613
  -716
  -826
  -942
  -1,064
  -1,192
  -1,326
  -1,465
  -1,609
  -1,758
  -1,912
  -2,072
  -2,237
  -2,408
  -2,584
  -2,767
  -2,957
  -3,154
  -3,358
  -3,570
  -3,790
  -4,020
  -4,259
  -4,507
  -4,767
  -5,037
  -5,320
Prev. year cash balance distribution, $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 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
 
  9
  -8
  -31
  -61
  -97
  -139
  -189
  -245
  -309
  -379
  -456
  -540
  -630
  -727
  -829
  -937
  -1,051
  -1,171
  -1,296
  -1,427
  -1,563
  -1,705
  -1,852
  -2,005
  -2,164
  -2,329
  -2,500
  -2,678
  -2,863
  -3,056
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  9
  -7
  -27
  -48
  -71
  -94
  -117
  -138
  -157
  -172
  -183
  -191
  -193
  -191
  -186
  -176
  -164
  -149
  -132
  -116
  -99
  -82
  -67
  -54
  -42
  -32
  -24
  -17
  -12
  -8
Current shareholders' claim on cash, %
  100
  91.3
  83.6
  76.8
  70.8
  65.5
  60.7
  56.4
  52.6
  49.1
  46.0
  43.1
  40.5
  38.1
  35.9
  33.8
  31.9
  30.2
  28.6
  27.0
  25.6
  24.3
  23.0
  21.9
  20.8
  19.7
  18.8
  17.8
  17.0
  16.2
  15.4

Norbord Inc. is a Canada-based producer of wood-based panels. The Company is engaged in manufacturing, sales, marketing and distribution of panelboards and related products used in the construction of new homes or the renovation and repair of existing structures. Its geographic segments include North America and Europe. It also produces oriented strand board (OSB), and manufactures particleboard, medium density fiberboard (MDF) and related value-added products. It has over 20 plant locations in the United States, Canada and Europe. In North America, the Company owns over 10 OSB production facilities located in the Southern region of the United States, Western Canada, Quebec, Ontario and Minnesota. In Europe, it operates an OSB production facility, two particleboard mills and one MDF mill in the United Kingdom and one OSB production facility in Belgium. Its OSB products are sold in North America under the brand names, including SolarBord, TruDeck and StableDeck.

FINANCIAL RATIOS  of  Norbord Inc. (OSB)

Valuation Ratios
P/E Ratio 14.7
Price to Sales 1.5
Price to Book 4.1
Price to Tangible Book
Price to Cash Flow 8.6
Price to Free Cash Flow 12.7
Growth Rates
Sales Growth Rate 17%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 47.8%
Cap. Spend. - 3 Yr. Gr. Rate 4.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 84.1%
Total Debt to Equity 114.8%
Interest Coverage 6
Management Effectiveness
Return On Assets 12.8%
Ret/ On Assets - 3 Yr. Avg. 3.6%
Return On Total Capital 13.6%
Ret/ On T. Cap. - 3 Yr. Avg. 2%
Return On Equity 31.3%
Return On Equity - 3 Yr. Avg. 4.9%
Asset Turnover 1
Profitability Ratios
Gross Margin 22%
Gross Margin - 3 Yr. Avg. 12.9%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 9.8%
Operating Margin 16.8%
Oper. Margin - 3 Yr. Avg. 4.5%
Pre-Tax Margin 13.8%
Pre-Tax Margin - 3 Yr. Avg. 1.2%
Net Profit Margin 10.4%
Net Profit Margin - 3 Yr. Avg. 1.4%
Effective Tax Rate 25.2%
Eff/ Tax Rate - 3 Yr. Avg. 34.8%
Payout Ratio 14.2%

OSB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OSB stock intrinsic value calculation we used $2386 million for the last fiscal year's total revenue generated by Norbord Inc.. The default revenue input number comes from 2016 income statement of Norbord Inc.. 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 OSB stock valuation model: a) initial revenue growth rate of 27.6% 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 5.3%, whose default value for OSB is calculated based on our internal credit rating of Norbord Inc., 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 Norbord Inc..
    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 OSB stock the variable cost ratio is equal to 101.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for OSB 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 6.6% for Norbord Inc..

Corporate tax rate of 27% is the nominal tax rate for Norbord Inc.. 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 OSB 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 OSB are equal to 36.9%.

Life of production assets of 6.9 years is the average useful life of capital assets used in Norbord Inc. 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 OSB is equal to 6.6%. 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 - $878 million for Norbord Inc. - 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 86.323 million for Norbord Inc. 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 Norbord Inc. at the current share price and the inputted number of shares is $3.7 billion.

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Financial statements of OSB
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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