Intrinsic value of Uni-Select Inc. - UNS

Previous Close

$27.68

  Intrinsic Value

$1.83

stock screener

  Rating & Target

str. sell

-93%

Previous close

$27.68

 
Intrinsic value

$1.83

 
Up/down potential

-93%

 
Rating

str. sell

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

We calculate the intrinsic value of UNS 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -11.63
  24.40
  22.46
  20.71
  19.14
  17.73
  16.46
  15.31
  14.28
  13.35
  12.52
  11.76
  11.09
  10.48
  9.93
  9.44
  8.99
  8.59
  8.24
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
  6.25
  6.13
  6.02
  5.91
Revenue, $m
  1,618
  2,013
  2,465
  2,975
  3,545
  4,173
  4,860
  5,604
  6,405
  7,260
  8,168
  9,129
  10,141
  11,204
  12,317
  13,479
  14,692
  15,955
  17,268
  18,635
  20,055
  21,531
  23,064
  24,658
  26,315
  28,038
  29,830
  31,696
  33,638
  35,661
  37,770
Variable operating expenses, $m
 
  2,103
  2,568
  3,094
  3,680
  4,326
  5,032
  5,798
  6,621
  7,501
  8,435
  9,391
  10,432
  11,525
  12,670
  13,866
  15,113
  16,412
  17,763
  19,169
  20,630
  22,148
  23,725
  25,365
  27,069
  28,842
  30,685
  32,604
  34,602
  36,684
  38,853
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
  1,495
  2,103
  2,568
  3,094
  3,680
  4,326
  5,032
  5,798
  6,621
  7,501
  8,435
  9,391
  10,432
  11,525
  12,670
  13,866
  15,113
  16,412
  17,763
  19,169
  20,630
  22,148
  23,725
  25,365
  27,069
  28,842
  30,685
  32,604
  34,602
  36,684
  38,853
Operating income, $m
  123
  -91
  -104
  -118
  -135
  -153
  -172
  -194
  -216
  -241
  -267
  -262
  -291
  -321
  -353
  -386
  -421
  -457
  -495
  -534
  -575
  -617
  -661
  -707
  -754
  -804
  -855
  -909
  -964
  -1,022
  -1,083
EBITDA, $m
  145
  -49
  -60
  -72
  -86
  -101
  -118
  -136
  -155
  -176
  -198
  -221
  -245
  -271
  -298
  -326
  -355
  -386
  -418
  -451
  -485
  -521
  -558
  -596
  -636
  -678
  -721
  -767
  -814
  -862
  -913
Interest expense (income), $m
  5
  6
  12
  19
  26
  35
  44
  54
  65
  77
  89
  102
  117
  131
  147
  163
  180
  198
  217
  236
  256
  277
  298
  321
  344
  368
  394
  420
  447
  476
  505
Earnings before tax, $m
  117
  -97
  -116
  -137
  -161
  -187
  -216
  -248
  -281
  -318
  -356
  -364
  -407
  -453
  -500
  -550
  -601
  -655
  -712
  -770
  -831
  -894
  -959
  -1,028
  -1,098
  -1,172
  -1,249
  -1,328
  -1,411
  -1,498
  -1,588
Tax expense, $m
  38
  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
  79
  -97
  -116
  -137
  -161
  -187
  -216
  -248
  -281
  -318
  -356
  -364
  -407
  -453
  -500
  -550
  -601
  -655
  -712
  -770
  -831
  -894
  -959
  -1,028
  -1,098
  -1,172
  -1,249
  -1,328
  -1,411
  -1,498
  -1,588

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  30
  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
  1,320
  1,605
  1,966
  2,373
  2,827
  3,328
  3,876
  4,469
  5,107
  5,789
  6,514
  7,280
  8,087
  8,935
  9,822
  10,749
  11,716
  12,723
  13,771
  14,860
  15,993
  17,170
  18,392
  19,663
  20,985
  22,359
  23,788
  25,276
  26,825
  28,438
  30,120
Adjusted assets (=assets-cash), $m
  1,290
  1,605
  1,966
  2,373
  2,827
  3,328
  3,876
  4,469
  5,107
  5,789
  6,514
  7,280
  8,087
  8,935
  9,822
  10,749
  11,716
  12,723
  13,771
  14,860
  15,993
  17,170
  18,392
  19,663
  20,985
  22,359
  23,788
  25,276
  26,825
  28,438
  30,120
Revenue / Adjusted assets
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
  1.254
Average production assets, $m
  133
  165
  202
  244
  291
  342
  399
  460
  525
  595
  670
  749
  832
  919
  1,010
  1,105
  1,205
  1,308
  1,416
  1,528
  1,644
  1,766
  1,891
  2,022
  2,158
  2,299
  2,446
  2,599
  2,758
  2,924
  3,097
Working capital, $m
  259
  292
  357
  431
  514
  605
  705
  813
  929
  1,053
  1,184
  1,324
  1,471
  1,625
  1,786
  1,955
  2,130
  2,313
  2,504
  2,702
  2,908
  3,122
  3,344
  3,575
  3,816
  4,065
  4,325
  4,596
  4,877
  5,171
  5,477
Total debt, $m
  189
  350
  539
  753
  991
  1,254
  1,542
  1,853
  2,188
  2,546
  2,927
  3,329
  3,753
  4,198
  4,664
  5,150
  5,658
  6,187
  6,737
  7,309
  7,903
  8,521
  9,163
  9,830
  10,524
  11,245
  11,996
  12,777
  13,590
  14,437
  15,320
Total liabilities, $m
  682
  843
  1,032
  1,246
  1,484
  1,747
  2,035
  2,346
  2,681
  3,039
  3,420
  3,822
  4,246
  4,691
  5,157
  5,643
  6,151
  6,680
  7,230
  7,802
  8,396
  9,014
  9,656
  10,323
  11,017
  11,738
  12,489
  13,270
  14,083
  14,930
  15,813
Total equity, $m
  638
  762
  934
  1,127
  1,343
  1,581
  1,841
  2,123
  2,426
  2,750
  3,094
  3,458
  3,841
  4,244
  4,666
  5,106
  5,565
  6,043
  6,541
  7,059
  7,597
  8,156
  8,736
  9,340
  9,968
  10,620
  11,299
  12,006
  12,742
  13,508
  14,307
Total liabilities and equity, $m
  1,320
  1,605
  1,966
  2,373
  2,827
  3,328
  3,876
  4,469
  5,107
  5,789
  6,514
  7,280
  8,087
  8,935
  9,823
  10,749
  11,716
  12,723
  13,771
  14,861
  15,993
  17,170
  18,392
  19,663
  20,985
  22,358
  23,788
  25,276
  26,825
  28,438
  30,120
Debt-to-equity ratio
  0.296
  0.460
  0.580
  0.670
  0.740
  0.790
  0.840
  0.870
  0.900
  0.930
  0.950
  0.960
  0.980
  0.990
  1.000
  1.010
  1.020
  1.020
  1.030
  1.040
  1.040
  1.040
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.070
  1.070
  1.070
Adjusted equity ratio
  0.471
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475
  0.475

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  79
  -97
  -116
  -137
  -161
  -187
  -216
  -248
  -281
  -318
  -356
  -364
  -407
  -453
  -500
  -550
  -601
  -655
  -712
  -770
  -831
  -894
  -959
  -1,028
  -1,098
  -1,172
  -1,249
  -1,328
  -1,411
  -1,498
  -1,588
Depreciation, amort., depletion, $m
  22
  42
  44
  46
  49
  52
  55
  58
  62
  65
  70
  41
  45
  50
  55
  60
  66
  71
  77
  83
  90
  96
  103
  110
  118
  126
  134
  142
  151
  160
  169
Funds from operations, $m
  208
  -55
  -72
  -91
  -112
  -136
  -161
  -190
  -220
  -252
  -287
  -323
  -362
  -402
  -445
  -489
  -536
  -584
  -634
  -686
  -741
  -797
  -856
  -917
  -980
  -1,046
  -1,115
  -1,186
  -1,261
  -1,338
  -1,419
Change in working capital, $m
  23
  57
  66
  74
  83
  91
  100
  108
  116
  124
  132
  139
  147
  154
  161
  169
  176
  183
  191
  198
  206
  214
  222
  231
  240
  250
  260
  270
  282
  293
  306
Cash from operations, $m
  185
  -112
  -137
  -165
  -195
  -227
  -261
  -297
  -336
  -376
  -418
  -463
  -509
  -556
  -606
  -658
  -711
  -767
  -825
  -885
  -947
  -1,011
  -1,078
  -1,148
  -1,221
  -1,296
  -1,375
  -1,457
  -1,542
  -1,632
  -1,725
Maintenance CAPEX, $m
  0
  -7
  -9
  -11
  -13
  -16
  -19
  -22
  -25
  -29
  -33
  -37
  -41
  -45
  -50
  -55
  -60
  -66
  -71
  -77
  -83
  -90
  -96
  -103
  -110
  -118
  -126
  -134
  -142
  -151
  -160
New CAPEX, $m
  -20
  -32
  -37
  -42
  -47
  -52
  -56
  -61
  -66
  -70
  -75
  -79
  -83
  -87
  -91
  -95
  -99
  -104
  -108
  -112
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -153
  -159
  -166
  -173
Cash from investing activities, $m
  -286
  -39
  -46
  -53
  -60
  -68
  -75
  -83
  -91
  -99
  -108
  -116
  -124
  -132
  -141
  -150
  -159
  -170
  -179
  -189
  -199
  -211
  -222
  -234
  -246
  -259
  -273
  -287
  -301
  -317
  -333
Free cash flow, $m
  -101
  -152
  -183
  -218
  -255
  -294
  -336
  -380
  -427
  -475
  -525
  -578
  -632
  -689
  -748
  -808
  -871
  -936
  -1,004
  -1,074
  -1,147
  -1,222
  -1,301
  -1,382
  -1,467
  -1,555
  -1,648
  -1,744
  -1,844
  -1,948
  -2,057
Issuance/(repayment) of debt, $m
  50
  166
  189
  214
  238
  263
  288
  312
  335
  358
  380
  402
  424
  445
  466
  487
  508
  529
  550
  572
  595
  618
  642
  667
  694
  721
  750
  781
  813
  847
  883
Issuance/(repurchase) of shares, $m
  -28
  246
  287
  330
  377
  425
  476
  529
  584
  641
  700
  728
  791
  855
  921
  990
  1,061
  1,134
  1,209
  1,287
  1,369
  1,453
  1,540
  1,631
  1,726
  1,825
  1,928
  2,035
  2,147
  2,264
  2,387
Cash from financing (excl. dividends), $m  
  21
  412
  476
  544
  615
  688
  764
  841
  919
  999
  1,080
  1,130
  1,215
  1,300
  1,387
  1,477
  1,569
  1,663
  1,759
  1,859
  1,964
  2,071
  2,182
  2,298
  2,420
  2,546
  2,678
  2,816
  2,960
  3,111
  3,270
Total cash flow (excl. dividends), $m
  -79
  260
  293
  326
  360
  394
  428
  461
  493
  525
  555
  552
  582
  611
  640
  668
  697
  726
  755
  785
  816
  848
  882
  916
  953
  991
  1,030
  1,072
  1,117
  1,163
  1,212
Retained Cash Flow (-), $m
  -48
  -246
  -287
  -330
  -377
  -425
  -476
  -529
  -584
  -641
  -700
  -728
  -791
  -855
  -921
  -990
  -1,061
  -1,134
  -1,209
  -1,287
  -1,369
  -1,453
  -1,540
  -1,631
  -1,726
  -1,825
  -1,928
  -2,035
  -2,147
  -2,264
  -2,387
Prev. year cash balance distribution, $m
 
  25
  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
 
  39
  6
  -4
  -16
  -31
  -49
  -69
  -92
  -117
  -145
  -176
  -209
  -244
  -282
  -322
  -364
  -408
  -454
  -502
  -552
  -604
  -659
  -715
  -773
  -834
  -897
  -963
  -1,030
  -1,101
  -1,174
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
 
  37
  5
  -3
  -13
  -24
  -35
  -46
  -57
  -67
  -76
  -83
  -89
  -93
  -95
  -94
  -92
  -89
  -84
  -77
  -70
  -63
  -55
  -47
  -39
  -32
  -26
  -21
  -16
  -12
  -9
Current shareholders' claim on cash, %
  100
  82.0
  68.0
  57.0
  48.2
  41.1
  35.3
  30.5
  26.5
  23.2
  20.4
  18.0
  16.0
  14.3
  12.8
  11.5
  10.3
  9.3
  8.4
  7.5
  6.8
  6.2
  5.6
  5.1
  4.6
  4.2
  3.8
  3.5
  3.2
  2.9
  2.6

Uni-Select Inc. is a Canada-based distributor of automotive products, and paint and related products for motor vehicles. The Company operates through three segments: Paint and Related Products (US), Automotive Products (Canada), and Corporate Office and Others. The Paint and Related Products (US) segment is engaged in the distribution of automotive refinish and industrial paint and related products representing its subsidiary, FinishMaster, Inc. Automotive Products (Canada) is engaged in the distribution of automotive aftermarket parts, including refinish and industrial paint and related products, through Canadian networks. In Canada, the Company supports automotive repair and collision repair shops, through corporate stores, which operate under the BUMPER TO BUMPER, AUTO PARTS PLUS and FINISHMASTER store banner programs. In the United States, the Company operates a national network of automotive refinish corporate stores under the FINISHMASTER banner.

FINANCIAL RATIOS  of  Uni-Select Inc. (UNS)

Valuation Ratios
P/E Ratio 14.8
Price to Sales 0.7
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 6.3
Price to Free Cash Flow 7.1
Growth Rates
Sales Growth Rate -11.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.5%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 28.8%
Total Debt to Equity 29.6%
Interest Coverage 24
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. 2.7%
Return On Total Capital 10.2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.5%
Return On Equity 12.9%
Return On Equity - 3 Yr. Avg. 4.8%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 30.6%
Gross Margin - 3 Yr. Avg. 30.1%
EBITDA Margin 8.9%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin 7.6%
Oper. Margin - 3 Yr. Avg. 2.3%
Pre-Tax Margin 7.2%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin 4.9%
Net Profit Margin - 3 Yr. Avg. 1.6%
Effective Tax Rate 32.5%
Eff/ Tax Rate - 3 Yr. Avg. 32.6%
Payout Ratio 17.7%

UNS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UNS stock intrinsic value calculation we used $1618 million for the last fiscal year's total revenue generated by Uni-Select Inc.. The default revenue input number comes from 2016 income statement of Uni-Select 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 UNS stock valuation model: a) initial revenue growth rate of 24.4% 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 UNS is calculated based on our internal credit rating of Uni-Select 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 Uni-Select 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 UNS stock the variable cost ratio is equal to 104.9%.

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 UNS 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 Uni-Select Inc..

Corporate tax rate of 27% is the nominal tax rate for Uni-Select 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 UNS 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 UNS are equal to 8.2%.

Life of production assets of 18.3 years is the average useful life of capital assets used in Uni-Select 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 UNS is equal to 14.5%. 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 - $638 million for Uni-Select 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 42.239 million for Uni-Select 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 Uni-Select Inc. at the current share price and the inputted number of shares is $1.2 billion.

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Financial statements of UNS
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