Intrinsic value of Saputo Inc. - SAP

Previous Close

$44.16

  Intrinsic Value

$161.00

stock screener

  Rating & Target

str. buy

+265%

Previous close

$44.16

 
Intrinsic value

$161.00

 
Up/down potential

+265%

 
Rating

str. buy

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

We calculate the intrinsic value of SAP 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 2017), $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 17.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  1.56
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  11,163
  12,268
  13,423
  14,626
  15,880
  17,185
  18,541
  19,951
  21,416
  22,939
  24,521
  26,166
  27,877
  29,657
  31,509
  33,437
  35,447
  37,541
  39,725
  42,003
  44,381
  46,865
  49,459
  52,171
  55,006
  57,971
  61,074
  64,321
  67,720
  71,280
  75,008
Variable operating expenses, $m
 
  2,235
  2,424
  2,622
  2,827
  3,041
  3,263
  3,495
  3,735
  3,984
  4,244
  4,289
  4,570
  4,861
  5,165
  5,481
  5,811
  6,154
  6,512
  6,885
  7,275
  7,682
  8,108
  8,552
  9,017
  9,503
  10,011
  10,544
  11,101
  11,684
  12,296
Fixed operating expenses, $m
 
  8,506
  8,719
  8,937
  9,161
  9,390
  9,624
  9,865
  10,112
  10,364
  10,623
  10,889
  11,161
  11,440
  11,726
  12,019
  12,320
  12,628
  12,944
  13,267
  13,599
  13,939
  14,287
  14,645
  15,011
  15,386
  15,771
  16,165
  16,569
  16,983
  17,408
Total operating expenses, $m
  10,122
  10,741
  11,143
  11,559
  11,988
  12,431
  12,887
  13,360
  13,847
  14,348
  14,867
  15,178
  15,731
  16,301
  16,891
  17,500
  18,131
  18,782
  19,456
  20,152
  20,874
  21,621
  22,395
  23,197
  24,028
  24,889
  25,782
  26,709
  27,670
  28,667
  29,704
Operating income, $m
  1,040
  1,527
  2,279
  3,068
  3,892
  4,754
  5,653
  6,592
  7,570
  8,590
  9,654
  10,988
  12,146
  13,355
  14,617
  15,937
  17,316
  18,759
  20,269
  21,850
  23,507
  25,243
  27,064
  28,974
  30,978
  33,082
  35,292
  37,612
  40,050
  42,612
  45,305
EBITDA, $m
  1,247
  1,876
  2,641
  3,442
  4,279
  5,154
  6,068
  7,020
  8,014
  9,049
  10,130
  11,256
  12,432
  13,659
  14,940
  16,279
  17,679
  19,144
  20,676
  22,281
  23,962
  25,724
  27,571
  29,509
  31,542
  33,676
  35,918
  38,271
  40,744
  43,343
  46,073
Interest expense (income), $m
  43
  53
  64
  75
  87
  100
  113
  126
  140
  155
  170
  186
  202
  219
  237
  255
  275
  295
  315
  337
  360
  384
  408
  434
  461
  490
  519
  550
  583
  616
  652
Earnings before tax, $m
  1,040
  1,474
  2,216
  2,993
  3,805
  4,655
  5,541
  6,466
  7,430
  8,435
  9,484
  10,802
  11,944
  13,136
  14,381
  15,681
  17,042
  18,464
  19,954
  21,513
  23,147
  24,860
  26,656
  28,540
  30,517
  32,593
  34,772
  37,062
  39,467
  41,996
  44,653
Tax expense, $m
  309
  398
  598
  808
  1,027
  1,257
  1,496
  1,746
  2,006
  2,278
  2,561
  2,917
  3,225
  3,547
  3,883
  4,234
  4,601
  4,985
  5,387
  5,809
  6,250
  6,712
  7,197
  7,706
  8,240
  8,800
  9,389
  10,007
  10,656
  11,339
  12,056
Net income, $m
  728
  1,076
  1,617
  2,185
  2,778
  3,398
  4,045
  4,720
  5,424
  6,158
  6,923
  7,886
  8,719
  9,589
  10,498
  11,447
  12,440
  13,479
  14,566
  15,705
  16,897
  18,148
  19,459
  20,834
  22,277
  23,793
  25,384
  27,055
  28,811
  30,657
  32,596

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  251
  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
  7,597
  8,071
  8,831
  9,623
  10,448
  11,306
  12,198
  13,126
  14,090
  15,091
  16,132
  17,215
  18,340
  19,511
  20,729
  21,998
  23,320
  24,698
  26,135
  27,634
  29,198
  30,832
  32,539
  34,323
  36,188
  38,139
  40,180
  42,316
  44,553
  46,894
  49,347
Adjusted assets (=assets-cash), $m
  7,346
  8,071
  8,831
  9,623
  10,448
  11,306
  12,198
  13,126
  14,090
  15,091
  16,132
  17,215
  18,340
  19,511
  20,729
  21,998
  23,320
  24,698
  26,135
  27,634
  29,198
  30,832
  32,539
  34,323
  36,188
  38,139
  40,180
  42,316
  44,553
  46,894
  49,347
Revenue / Adjusted assets
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
  1.520
Average production assets, $m
  2,750
  3,018
  3,302
  3,598
  3,907
  4,227
  4,561
  4,908
  5,268
  5,643
  6,032
  6,437
  6,858
  7,296
  7,751
  8,226
  8,720
  9,235
  9,772
  10,333
  10,918
  11,529
  12,167
  12,834
  13,531
  14,261
  15,024
  15,823
  16,659
  17,535
  18,452
Working capital, $m
  1,188
  1,129
  1,235
  1,346
  1,461
  1,581
  1,706
  1,836
  1,970
  2,110
  2,256
  2,407
  2,565
  2,728
  2,899
  3,076
  3,261
  3,454
  3,655
  3,864
  4,083
  4,312
  4,550
  4,800
  5,061
  5,333
  5,619
  5,917
  6,230
  6,558
  6,901
Total debt, $m
  1,594
  1,815
  2,144
  2,487
  2,844
  3,215
  3,602
  4,003
  4,421
  4,855
  5,305
  5,774
  6,261
  6,768
  7,296
  7,845
  8,418
  9,014
  9,636
  10,285
  10,963
  11,670
  12,409
  13,182
  13,989
  14,834
  15,718
  16,643
  17,611
  18,625
  19,687
Total liabilities, $m
  3,274
  3,495
  3,824
  4,167
  4,524
  4,895
  5,282
  5,683
  6,101
  6,535
  6,985
  7,454
  7,941
  8,448
  8,976
  9,525
  10,098
  10,694
  11,316
  11,965
  12,643
  13,350
  14,089
  14,862
  15,669
  16,514
  17,398
  18,323
  19,291
  20,305
  21,367
Total equity, $m
  4,323
  4,576
  5,007
  5,456
  5,924
  6,410
  6,916
  7,442
  7,989
  8,557
  9,147
  9,761
  10,399
  11,063
  11,754
  12,473
  13,223
  14,004
  14,818
  15,668
  16,555
  17,482
  18,450
  19,461
  20,519
  21,625
  22,782
  23,993
  25,261
  26,589
  27,980
Total liabilities and equity, $m
  7,597
  8,071
  8,831
  9,623
  10,448
  11,305
  12,198
  13,125
  14,090
  15,092
  16,132
  17,215
  18,340
  19,511
  20,730
  21,998
  23,321
  24,698
  26,134
  27,633
  29,198
  30,832
  32,539
  34,323
  36,188
  38,139
  40,180
  42,316
  44,552
  46,894
  49,347
Debt-to-equity ratio
  0.369
  0.400
  0.430
  0.460
  0.480
  0.500
  0.520
  0.540
  0.550
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.640
  0.650
  0.660
  0.660
  0.670
  0.670
  0.680
  0.680
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
Adjusted equity ratio
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  728
  1,076
  1,617
  2,185
  2,778
  3,398
  4,045
  4,720
  5,424
  6,158
  6,923
  7,886
  8,719
  9,589
  10,498
  11,447
  12,440
  13,479
  14,566
  15,705
  16,897
  18,148
  19,459
  20,834
  22,277
  23,793
  25,384
  27,055
  28,811
  30,657
  32,596
Depreciation, amort., depletion, $m
  207
  350
  362
  374
  387
  400
  414
  429
  444
  459
  475
  268
  286
  304
  323
  343
  363
  385
  407
  431
  455
  480
  507
  535
  564
  594
  626
  659
  694
  731
  769
Funds from operations, $m
  824
  1,426
  1,979
  2,559
  3,165
  3,798
  4,459
  5,148
  5,867
  6,617
  7,399
  8,154
  9,005
  9,893
  10,821
  11,790
  12,804
  13,864
  14,973
  16,135
  17,352
  18,628
  19,966
  21,369
  22,841
  24,387
  26,010
  27,714
  29,505
  31,387
  33,365
Change in working capital, $m
  -250
  102
  106
  111
  115
  120
  125
  130
  135
  140
  146
  151
  157
  164
  170
  177
  185
  193
  201
  210
  219
  228
  239
  249
  261
  273
  285
  299
  313
  327
  343
Cash from operations, $m
  1,074
  1,324
  1,873
  2,448
  3,049
  3,678
  4,334
  5,019
  5,733
  6,477
  7,253
  8,002
  8,847
  9,729
  10,650
  11,613
  12,619
  13,671
  14,772
  15,926
  17,133
  18,400
  19,727
  21,119
  22,580
  24,114
  25,724
  27,416
  29,193
  31,060
  33,022
Maintenance CAPEX, $m
  0
  -115
  -126
  -138
  -150
  -163
  -176
  -190
  -204
  -220
  -235
  -251
  -268
  -286
  -304
  -323
  -343
  -363
  -385
  -407
  -431
  -455
  -480
  -507
  -535
  -564
  -594
  -626
  -659
  -694
  -731
New CAPEX, $m
  -321
  -268
  -284
  -296
  -308
  -321
  -334
  -347
  -360
  -375
  -389
  -405
  -421
  -438
  -456
  -474
  -494
  -515
  -537
  -560
  -585
  -611
  -638
  -667
  -697
  -729
  -763
  -799
  -836
  -876
  -917
Cash from investing activities, $m
  -318
  -383
  -410
  -434
  -458
  -484
  -510
  -537
  -564
  -595
  -624
  -656
  -689
  -724
  -760
  -797
  -837
  -878
  -922
  -967
  -1,016
  -1,066
  -1,118
  -1,174
  -1,232
  -1,293
  -1,357
  -1,425
  -1,495
  -1,570
  -1,648
Free cash flow, $m
  756
  942
  1,463
  2,014
  2,591
  3,194
  3,824
  4,482
  5,168
  5,883
  6,629
  7,346
  8,158
  9,006
  9,891
  10,815
  11,782
  12,793
  13,850
  14,958
  16,118
  17,334
  18,608
  19,945
  21,348
  22,821
  24,367
  25,991
  27,697
  29,490
  31,374
Issuance/(repayment) of debt, $m
  -34
  315
  329
  343
  357
  372
  386
  402
  417
  434
  451
  469
  487
  507
  528
  549
  572
  597
  622
  649
  677
  707
  739
  772
  808
  845
  884
  925
  968
  1,014
  1,062
Issuance/(repurchase) of shares, $m
  -347
  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  
  -452
  315
  329
  343
  357
  372
  386
  402
  417
  434
  451
  469
  487
  507
  528
  549
  572
  597
  622
  649
  677
  707
  739
  772
  808
  845
  884
  925
  968
  1,014
  1,062
Total cash flow (excl. dividends), $m
  314
  1,256
  1,792
  2,357
  2,948
  3,566
  4,211
  4,884
  5,585
  6,317
  7,080
  7,815
  8,646
  9,513
  10,418
  11,365
  12,354
  13,389
  14,472
  15,607
  16,795
  18,041
  19,347
  20,718
  22,156
  23,665
  25,251
  26,916
  28,665
  30,504
  32,437
Retained Cash Flow (-), $m
  -321
  -410
  -431
  -449
  -468
  -487
  -506
  -526
  -547
  -568
  -590
  -614
  -638
  -664
  -691
  -719
  -749
  -781
  -815
  -850
  -887
  -926
  -968
  -1,012
  -1,058
  -1,106
  -1,157
  -1,211
  -1,268
  -1,328
  -1,391
Prev. year cash balance distribution, $m
 
  157
  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
 
  1,003
  1,361
  1,908
  2,481
  3,079
  3,705
  4,358
  5,039
  5,749
  6,489
  7,201
  8,008
  8,849
  9,727
  10,645
  11,605
  12,608
  13,658
  14,757
  15,908
  17,115
  18,380
  19,706
  21,098
  22,559
  24,093
  25,705
  27,397
  29,176
  31,046
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
 
  962
  1,246
  1,660
  2,043
  2,387
  2,689
  2,944
  3,149
  3,302
  3,402
  3,420
  3,417
  3,365
  3,266
  3,125
  2,949
  2,743
  2,515
  2,272
  2,021
  1,770
  1,525
  1,292
  1,075
  878
  703
  552
  424
  318
  234
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

Saputo Inc. produces, markets and distributes dairy products, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients. The Company has three geographic sectors. The Canada Sector consists of Dairy Division (Canada). The USA Sector aggregates the Cheese Division (USA) and the Dairy Foods Division (USA). The International Sector combines the Dairy Division (Argentina), the Dairy Ingredients Division and the Dairy Division (Australia). The Dairy Ingredients Division includes national and export ingredients sales from the North American divisions, as well as cheese exports from these same divisions. The Company's products are sold under brand names, such as Saputo, Alexis de Portneuf, Armstrong, COON, Cracker Barrel, Dairyland, DairyStar, Friendship Dairies, Frigo Cheese Heads, La Paulina, Milk2Go/Lait's Go, Neilson, Nutrilait, Scotsburn, Stella, Sungold, Treasure Cave and Woolwich Dairy.

FINANCIAL RATIOS  of  Saputo Inc. (SAP)

Valuation Ratios
P/E Ratio 23.4
Price to Sales 1.5
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 15.9
Price to Free Cash Flow 22.7
Growth Rates
Sales Growth Rate 1.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 38.4%
Cap. Spend. - 3 Yr. Gr. Rate 7.5%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 34.7%
Total Debt to Equity 36.9%
Interest Coverage 25
Management Effectiveness
Return On Assets 10.3%
Ret/ On Assets - 3 Yr. Avg. 9.8%
Return On Total Capital 12.6%
Ret/ On T. Cap. - 3 Yr. Avg. 11.8%
Return On Equity 17.5%
Return On Equity - 3 Yr. Avg. 17.5%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 31.3%
Gross Margin - 3 Yr. Avg. 29.6%
EBITDA Margin 11.6%
EBITDA Margin - 3 Yr. Avg. 10.7%
Operating Margin 9.3%
Oper. Margin - 3 Yr. Avg. 8.4%
Pre-Tax Margin 9.3%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 6.5%
Net Profit Margin - 3 Yr. Avg. 5.9%
Effective Tax Rate 29.7%
Eff/ Tax Rate - 3 Yr. Avg. 29.5%
Payout Ratio 31.3%

SAP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SAP stock intrinsic value calculation we used $11163 million for the last fiscal year's total revenue generated by Saputo Inc.. The default revenue input number comes from 2017 income statement of Saputo 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 SAP stock valuation model: a) initial revenue growth rate of 9.9% 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 4.3%, whose default value for SAP is calculated based on our internal credit rating of Saputo 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 Saputo 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 SAP stock the variable cost ratio is equal to 18.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8299 million in the base year in the intrinsic value calculation for SAP 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 3.5% for Saputo Inc..

Corporate tax rate of 27% is the nominal tax rate for Saputo 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 SAP 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 SAP are equal to 24.6%.

Life of production assets of 24 years is the average useful life of capital assets used in Saputo 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 SAP is equal to 9.2%. 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 - $4323 million for Saputo 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 386.006 million for Saputo 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 Saputo Inc. at the current share price and the inputted number of shares is $17.0 billion.

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Financial statements of SAP
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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