Intrinsic value of ShawCor Ltd. - SCL

Previous Close

$25.48

  Intrinsic Value

$843.57

stock screener

  Rating & Target

str. buy

+999%

Previous close

$25.48

 
Intrinsic value

$843.57

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SCL 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 1.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  53.30
  48.47
  44.12
  40.21
  36.69
  33.52
  30.67
  28.10
  25.79
  23.71
  21.84
  20.16
  18.64
  17.28
  16.05
  14.94
  13.95
  13.06
  12.25
  11.52
  10.87
  10.28
  9.76
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
Revenue, $m
  1,853
  2,752
  3,966
  5,561
  7,601
  10,149
  13,261
  16,988
  21,369
  26,436
  32,210
  38,703
  45,917
  53,851
  62,493
  71,833
  81,853
  92,539
  103,875
  115,846
  128,441
  141,651
  155,471
  169,900
  184,941
  200,601
  216,891
  233,827
  251,429
  269,721
Variable operating expenses, $m
  895
  1,312
  1,875
  2,615
  3,562
  4,744
  6,188
  7,917
  9,950
  12,301
  14,944
  17,957
  21,304
  24,985
  28,995
  33,328
  37,977
  42,935
  48,195
  53,749
  59,593
  65,722
  72,134
  78,828
  85,807
  93,072
  100,630
  108,488
  116,655
  125,142
Fixed operating expenses, $m
  804
  822
  840
  859
  877
  897
  916
  937
  957
  978
  1,000
  1,022
  1,044
  1,067
  1,091
  1,115
  1,139
  1,164
  1,190
  1,216
  1,243
  1,270
  1,298
  1,327
  1,356
  1,386
  1,416
  1,447
  1,479
  1,512
Total operating expenses, $m
  1,699
  2,134
  2,715
  3,474
  4,439
  5,641
  7,104
  8,854
  10,907
  13,279
  15,944
  18,979
  22,348
  26,052
  30,086
  34,443
  39,116
  44,099
  49,385
  54,965
  60,836
  66,992
  73,432
  80,155
  87,163
  94,458
  102,046
  109,935
  118,134
  126,654
Operating income, $m
  154
  618
  1,251
  2,087
  3,162
  4,508
  6,157
  8,134
  10,462
  13,157
  16,266
  19,724
  23,569
  27,798
  32,408
  37,390
  42,737
  48,440
  54,490
  60,881
  67,606
  74,659
  82,039
  89,745
  97,778
  106,143
  114,844
  123,892
  133,295
  143,067
EBITDA, $m
  267
  768
  1,451
  2,354
  3,514
  4,967
  6,746
  8,879
  11,390
  14,296
  17,611
  21,340
  25,487
  30,047
  35,018
  40,390
  46,155
  52,305
  58,829
  65,719
  72,970
  80,575
  88,533
  96,841
  105,502
  114,521
  123,903
  133,657
  143,796
  154,332
Interest expense (income), $m
  18
  13
  31
  56
  90
  135
  192
  264
  351
  456
  579
  721
  883
  1,066
  1,268
  1,491
  1,734
  1,996
  2,277
  2,577
  2,896
  3,232
  3,585
  3,956
  4,344
  4,750
  5,172
  5,612
  6,069
  6,545
  7,039
Earnings before tax, $m
  141
  587
  1,195
  1,997
  3,027
  4,316
  5,893
  7,783
  10,006
  12,578
  15,545
  18,841
  22,503
  26,530
  30,917
  35,656
  40,741
  46,162
  51,913
  57,985
  64,374
  71,074
  78,083
  85,401
  93,029
  100,971
  109,233
  117,822
  126,750
  136,028
Tax expense, $m
  38
  159
  323
  539
  817
  1,165
  1,591
  2,101
  2,702
  3,396
  4,197
  5,087
  6,076
  7,163
  8,348
  9,627
  11,000
  12,464
  14,017
  15,656
  17,381
  19,190
  21,082
  23,058
  25,118
  27,262
  29,493
  31,812
  34,223
  36,728
Net income, $m
  103
  429
  872
  1,458
  2,210
  3,151
  4,302
  5,682
  7,305
  9,182
  11,348
  13,754
  16,427
  19,367
  22,569
  26,029
  29,741
  33,699
  37,897
  42,329
  46,993
  51,884
  57,001
  62,343
  67,911
  73,709
  79,740
  86,010
  92,528
  99,300

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  2,423
  3,597
  5,184
  7,269
  9,936
  13,266
  17,335
  22,206
  27,933
  34,557
  42,105
  50,592
  60,023
  70,393
  81,691
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,230
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Adjusted assets (=assets-cash), $m
  2,423
  3,597
  5,184
  7,269
  9,936
  13,266
  17,335
  22,206
  27,933
  34,557
  42,105
  50,592
  60,023
  70,393
  81,691
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,230
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Revenue / Adjusted assets
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
Average production assets, $m
  1,053
  1,563
  2,253
  3,158
  4,317
  5,764
  7,532
  9,649
  12,138
  15,016
  18,295
  21,983
  26,081
  30,587
  35,496
  40,801
  46,493
  52,562
  59,001
  65,801
  72,955
  80,458
  88,308
  96,503
  105,047
  113,941
  123,194
  132,814
  142,812
  153,201
Working capital, $m
  132
  195
  282
  395
  540
  721
  942
  1,206
  1,517
  1,877
  2,287
  2,748
  3,260
  3,823
  4,437
  5,100
  5,812
  6,570
  7,375
  8,225
  9,119
  10,057
  11,038
  12,063
  13,131
  14,243
  15,399
  16,602
  17,851
  19,150
Total debt, $m
  668
  1,217
  1,958
  2,932
  4,177
  5,732
  7,632
  9,907
  12,582
  15,675
  19,200
  23,163
  27,568
  32,410
  37,686
  43,388
  49,505
  56,028
  62,948
  70,256
  77,945
  86,009
  94,446
  103,254
  112,436
  121,995
  131,940
  142,279
  153,024
  164,190
Total liabilities, $m
  1,131
  1,680
  2,421
  3,395
  4,640
  6,195
  8,095
  10,370
  13,045
  16,138
  19,663
  23,626
  28,031
  32,873
  38,149
  43,851
  49,968
  56,491
  63,411
  70,719
  78,408
  86,472
  94,909
  103,717
  112,899
  122,458
  132,403
  142,742
  153,487
  164,653
Total equity, $m
  1,291
  1,917
  2,763
  3,874
  5,296
  7,071
  9,239
  11,836
  14,888
  18,419
  22,442
  26,965
  31,992
  37,519
  43,541
  50,048
  57,030
  64,475
  72,373
  80,714
  89,489
  98,693
  108,322
  118,375
  128,854
  139,765
  151,115
  162,915
  175,179
  187,923
Total liabilities and equity, $m
  2,422
  3,597
  5,184
  7,269
  9,936
  13,266
  17,334
  22,206
  27,933
  34,557
  42,105
  50,591
  60,023
  70,392
  81,690
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,231
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Debt-to-equity ratio
  0.520
  0.630
  0.710
  0.760
  0.790
  0.810
  0.830
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
Adjusted equity ratio
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  103
  429
  872
  1,458
  2,210
  3,151
  4,302
  5,682
  7,305
  9,182
  11,348
  13,754
  16,427
  19,367
  22,569
  26,029
  29,741
  33,699
  37,897
  42,329
  46,993
  51,884
  57,001
  62,343
  67,911
  73,709
  79,740
  86,010
  92,528
  99,300
Depreciation, amort., depletion, $m
  113
  150
  201
  267
  353
  459
  589
  745
  928
  1,139
  1,345
  1,616
  1,918
  2,249
  2,610
  3,000
  3,419
  3,865
  4,338
  4,838
  5,364
  5,916
  6,493
  7,096
  7,724
  8,378
  9,058
  9,766
  10,501
  11,265
Funds from operations, $m
  216
  579
  1,073
  1,725
  2,562
  3,610
  4,891
  6,426
  8,232
  10,321
  12,693
  15,370
  18,345
  21,616
  25,179
  29,029
  33,159
  37,563
  42,235
  47,168
  52,357
  57,800
  63,494
  69,438
  75,635
  82,087
  88,798
  95,776
  103,028
  110,565
Change in working capital, $m
  46
  64
  86
  113
  145
  181
  221
  265
  311
  360
  410
  461
  512
  563
  614
  663
  711
  759
  805
  850
  894
  938
  981
  1,024
  1,068
  1,112
  1,157
  1,202
  1,250
  1,299
Cash from operations, $m
  170
  515
  987
  1,612
  2,417
  3,429
  4,670
  6,162
  7,921
  9,962
  12,283
  14,909
  17,833
  21,053
  24,566
  28,366
  32,448
  36,805
  41,430
  46,318
  51,463
  56,862
  62,513
  68,414
  74,567
  80,975
  87,642
  94,574
  101,779
  109,267
Maintenance CAPEX, $m
  -50
  -77
  -115
  -166
  -232
  -317
  -424
  -554
  -709
  -892
  -1,104
  -1,345
  -1,616
  -1,918
  -2,249
  -2,610
  -3,000
  -3,419
  -3,865
  -4,338
  -4,838
  -5,364
  -5,916
  -6,493
  -7,096
  -7,724
  -8,378
  -9,058
  -9,766
  -10,501
New CAPEX, $m
  -366
  -510
  -690
  -906
  -1,159
  -1,447
  -1,768
  -2,117
  -2,489
  -2,878
  -3,280
  -3,688
  -4,098
  -4,506
  -4,909
  -5,305
  -5,692
  -6,070
  -6,439
  -6,800
  -7,154
  -7,503
  -7,850
  -8,196
  -8,543
  -8,895
  -9,253
  -9,620
  -9,998
  -10,390
Cash from investing activities, $m
  -416
  -587
  -805
  -1,072
  -1,391
  -1,764
  -2,192
  -2,671
  -3,198
  -3,770
  -4,384
  -5,033
  -5,714
  -6,424
  -7,158
  -7,915
  -8,692
  -9,489
  -10,304
  -11,138
  -11,992
  -12,867
  -13,766
  -14,689
  -15,639
  -16,619
  -17,631
  -18,678
  -19,764
  -20,891
Free cash flow, $m
  -247
  -73
  182
  540
  1,026
  1,664
  2,478
  3,491
  4,723
  6,191
  7,899
  9,876
  12,119
  14,629
  17,407
  20,451
  23,756
  27,317
  31,126
  35,180
  39,471
  43,994
  48,747
  53,725
  58,928
  64,356
  70,011
  75,895
  82,015
  88,376
Issuance/(repayment) of debt, $m
  393
  548
  741
  974
  1,245
  1,555
  1,900
  2,275
  2,675
  3,093
  3,525
  3,963
  4,404
  4,843
  5,276
  5,701
  6,117
  6,523
  6,920
  7,308
  7,689
  8,064
  8,437
  8,808
  9,182
  9,560
  9,944
  10,339
  10,745
  11,166
Issuance/(repurchase) of shares, $m
  345
  197
  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  
  738
  745
  741
  974
  1,245
  1,555
  1,900
  2,275
  2,675
  3,093
  3,525
  3,963
  4,404
  4,843
  5,276
  5,701
  6,117
  6,523
  6,920
  7,308
  7,689
  8,064
  8,437
  8,808
  9,182
  9,560
  9,944
  10,339
  10,745
  11,166
Total cash flow (excl. dividends), $m
  492
  673
  923
  1,514
  2,272
  3,219
  4,378
  5,766
  7,398
  9,284
  11,424
  13,840
  16,523
  19,472
  22,683
  26,153
  29,873
  33,840
  38,046
  42,488
  47,159
  52,059
  57,183
  62,533
  68,110
  73,916
  79,955
  86,234
  92,760
  99,542
Retained Cash Flow (-), $m
  -448
  -626
  -846
  -1,111
  -1,421
  -1,775
  -2,169
  -2,596
  -3,053
  -3,530
  -4,023
  -4,524
  -5,027
  -5,527
  -6,022
  -6,507
  -6,982
  -7,445
  -7,898
  -8,341
  -8,775
  -9,204
  -9,629
  -10,053
  -10,479
  -10,911
  -11,350
  -11,800
  -12,264
  -12,744
Prev. year cash balance distribution, $m
  194
  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
  237
  47
  77
  403
  850
  1,444
  2,210
  3,170
  4,345
  5,754
  7,401
  9,316
  11,496
  13,945
  16,662
  19,646
  22,892
  26,395
  30,148
  34,147
  38,384
  42,855
  47,554
  52,480
  57,630
  63,005
  68,605
  74,434
  80,496
  86,798
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
  228
  43
  67
  332
  659
  1,048
  1,493
  1,981
  2,496
  3,017
  3,515
  3,975
  4,371
  4,681
  4,892
  4,992
  4,981
  4,861
  4,642
  4,339
  3,970
  3,556
  3,117
  2,673
  2,242
  1,838
  1,472
  1,152
  879
  654
Current shareholders' claim on cash, %
  80.8
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2
  74.2

Shawcor Ltd is a Canada-based energy services company. The Company is engaged in designing, engineering, marketing and selling products and services, such as pipe coating services; flexible composite pipe; onshore and offshore pipeline corrosion and thermal protection; ultrasonic and radiographic inspection services; tubular management services; heat-shrinkable polymer tubing, and control and instrumentation wire and cable. The Company operates through the following segments: Pipeline and Pipe Services, and Petrochemical and Industrial. The Pipeline and Pipe Services segment includes the Bredero Shaw, Canusa-CPS, Shaw Pipeline Services, Flexpipe Systems, Guardian, Desert NDT and Lake Superior Consulting divisions. The Petrochemical and Industrial segment consists of the Connection Systems division. The Company is an applicator of pipeline coatings for the oil and gas industry for both onshore and offshore pipelines.

FINANCIAL RATIOS  of  ShawCor Ltd. (SCL)

Valuation Ratios
P/E Ratio -9.8
Price to Sales 1.5
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 13.5
Price to Free Cash Flow 41.4
Growth Rates
Sales Growth Rate -33.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 45.9%
Cap. Spend. - 3 Yr. Gr. Rate 2.9%
Financial Strength
Quick Ratio 66
Current Ratio 0
LT Debt to Equity 26.5%
Total Debt to Equity 26.8%
Interest Coverage -9
Management Effectiveness
Return On Assets -8.3%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital -12.3%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity -16.8%
Return On Equity - 3 Yr. Avg. 1.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 32.4%
Gross Margin - 3 Yr. Avg. 34.7%
EBITDA Margin -6.3%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -12.8%
Oper. Margin - 3 Yr. Avg. 1.1%
Pre-Tax Margin -14.4%
Pre-Tax Margin - 3 Yr. Avg. -0.4%
Net Profit Margin -15%
Net Profit Margin - 3 Yr. Avg. -1.5%
Effective Tax Rate -4%
Eff/ Tax Rate - 3 Yr. Avg. 12.6%
Payout Ratio -21.5%

SCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SCL stock intrinsic value calculation we used $1209 million for the last fiscal year's total revenue generated by ShawCor Ltd.. The default revenue input number comes from 2016 income statement of ShawCor Ltd.. 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 SCL stock valuation model: a) initial revenue growth rate of 53.3% 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 SCL is calculated based on our internal credit rating of ShawCor Ltd., 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 ShawCor Ltd..
    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 SCL stock the variable cost ratio is equal to 49.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $787 million in the base year in the intrinsic value calculation for SCL 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 4.6% for ShawCor Ltd..

Corporate tax rate of 27% is the nominal tax rate for ShawCor Ltd.. 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 SCL 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 SCL are equal to 56.8%.

Life of production assets of 13.6 years is the average useful life of capital assets used in ShawCor Ltd. 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 SCL is equal to 7.1%. 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 - $1037 million for ShawCor Ltd. - 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 70.022 million for ShawCor Ltd. 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 ShawCor Ltd. at the current share price and the inputted number of shares is $1.8 billion.

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