Intrinsic value of Parkland Fuel Corporation - PKI

Previous Close

$28.92

  Intrinsic Value

$79.84

stock screener

  Rating & Target

str. buy

+176%

Previous close

$28.92

 
Intrinsic value

$79.84

 
Up/down potential

+176%

 
Rating

str. buy

We calculate the intrinsic value of PKI 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, %
  -0.54
  58.80
  53.42
  48.58
  44.22
  40.30
  36.77
  33.59
  30.73
  28.16
  25.84
  23.76
  21.88
  20.19
  18.68
  17.31
  16.08
  14.97
  13.97
  13.08
  12.27
  11.54
  10.89
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.53
Revenue, $m
  6,266
  9,950
  15,266
  22,682
  32,712
  45,894
  62,768
  83,853
  109,623
  140,492
  176,800
  218,806
  266,687
  320,544
  380,406
  446,246
  517,989
  595,528
  678,737
  767,482
  861,634
  961,073
  1,065,703
  1,175,450
  1,290,271
  1,410,155
  1,535,127
  1,665,246
  1,800,604
  1,941,333
  2,087,594
Variable operating expenses, $m
 
  9,768
  14,956
  22,195
  31,985
  44,851
  61,322
  81,902
  107,055
  137,185
  172,624
  213,568
  260,304
  312,871
  371,300
  435,564
  505,589
  581,272
  662,490
  749,111
  841,009
  938,068
  1,040,193
  1,147,313
  1,259,385
  1,376,400
  1,498,381
  1,625,384
  1,757,503
  1,894,863
  2,037,623
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
  6,140
  9,768
  14,956
  22,195
  31,985
  44,851
  61,322
  81,902
  107,055
  137,185
  172,624
  213,568
  260,304
  312,871
  371,300
  435,564
  505,589
  581,272
  662,490
  749,111
  841,009
  938,068
  1,040,193
  1,147,313
  1,259,385
  1,376,400
  1,498,381
  1,625,384
  1,757,503
  1,894,863
  2,037,623
Operating income, $m
  126
  182
  309
  487
  727
  1,043
  1,446
  1,951
  2,568
  3,307
  4,176
  5,238
  6,384
  7,673
  9,106
  10,682
  12,399
  14,255
  16,247
  18,371
  20,625
  23,005
  25,510
  28,137
  30,885
  33,755
  36,747
  39,861
  43,101
  46,470
  49,971
EBITDA, $m
  229
  331
  508
  755
  1,089
  1,528
  2,090
  2,792
  3,650
  4,677
  5,886
  7,284
  8,879
  10,672
  12,664
  14,856
  17,245
  19,826
  22,596
  25,551
  28,685
  31,996
  35,479
  39,133
  42,956
  46,947
  51,107
  55,439
  59,946
  64,631
  69,500
Interest expense (income), $m
  27
  34
  77
  139
  225
  341
  494
  690
  935
  1,234
  1,592
  2,014
  2,501
  3,057
  3,683
  4,377
  5,142
  5,975
  6,875
  7,841
  8,871
  9,964
  11,118
  12,333
  13,607
  14,940
  16,332
  17,783
  19,293
  20,865
  22,498
Earnings before tax, $m
  67
  148
  233
  348
  502
  701
  952
  1,261
  1,633
  2,073
  2,584
  3,224
  3,882
  4,616
  5,423
  6,304
  7,257
  8,281
  9,372
  10,530
  11,754
  13,041
  14,391
  15,804
  17,278
  18,815
  20,415
  22,078
  23,808
  25,605
  27,473
Tax expense, $m
  20
  40
  63
  94
  136
  189
  257
  341
  441
  560
  698
  870
  1,048
  1,246
  1,464
  1,702
  1,959
  2,236
  2,530
  2,843
  3,174
  3,521
  3,886
  4,267
  4,665
  5,080
  5,512
  5,961
  6,428
  6,913
  7,418
Net income, $m
  47
  108
  170
  254
  367
  512
  695
  921
  1,192
  1,513
  1,886
  2,353
  2,834
  3,369
  3,959
  4,602
  5,298
  6,045
  6,842
  7,687
  8,580
  9,520
  10,506
  11,537
  12,613
  13,735
  14,903
  16,117
  17,380
  18,692
  20,055

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  26
  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
  2,562
  4,027
  6,178
  9,179
  13,238
  18,573
  25,402
  33,935
  44,364
  56,856
  71,550
  88,550
  107,927
  129,722
  153,948
  180,593
  209,627
  241,007
  274,681
  310,596
  348,698
  388,941
  431,284
  475,698
  522,165
  570,682
  621,257
  673,916
  728,695
  785,647
  844,838
Adjusted assets (=assets-cash), $m
  2,536
  4,027
  6,178
  9,179
  13,238
  18,573
  25,402
  33,935
  44,364
  56,856
  71,550
  88,550
  107,927
  129,722
  153,948
  180,593
  209,627
  241,007
  274,681
  310,596
  348,698
  388,941
  431,284
  475,698
  522,165
  570,682
  621,257
  673,916
  728,695
  785,647
  844,838
Revenue / Adjusted assets
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
  2.471
Average production assets, $m
  726
  1,154
  1,771
  2,631
  3,795
  5,324
  7,281
  9,727
  12,716
  16,297
  20,509
  25,381
  30,936
  37,183
  44,127
  51,765
  60,087
  69,081
  78,733
  89,028
  99,949
  111,484
  123,622
  136,352
  149,671
  163,578
  178,075
  193,168
  208,870
  225,195
  242,161
Working capital, $m
  91
  577
  885
  1,316
  1,897
  2,662
  3,641
  4,863
  6,358
  8,149
  10,254
  12,691
  15,468
  18,592
  22,064
  25,882
  30,043
  34,541
  39,367
  44,514
  49,975
  55,742
  61,811
  68,176
  74,836
  81,789
  89,037
  96,584
  104,435
  112,597
  121,080
Total debt, $m
  837
  1,829
  3,299
  5,348
  8,121
  11,764
  16,429
  22,257
  29,380
  37,912
  47,948
  59,558
  72,793
  87,679
  104,226
  122,424
  142,254
  163,687
  186,686
  211,216
  237,240
  264,726
  293,646
  323,981
  355,718
  388,855
  423,398
  459,363
  496,777
  535,676
  576,103
Total liabilities, $m
  1,758
  2,750
  4,220
  6,269
  9,042
  12,685
  17,350
  23,178
  30,301
  38,833
  48,869
  60,479
  73,714
  88,600
  105,147
  123,345
  143,175
  164,608
  187,607
  212,137
  238,161
  265,647
  294,567
  324,902
  356,639
  389,776
  424,319
  460,284
  497,698
  536,597
  577,024
Total equity, $m
  804
  1,277
  1,958
  2,910
  4,197
  5,888
  8,052
  10,757
  14,063
  18,024
  22,681
  28,070
  34,213
  41,122
  48,802
  57,248
  66,452
  76,399
  87,074
  98,459
  110,537
  123,294
  136,717
  150,796
  165,526
  180,906
  196,939
  213,631
  230,996
  249,050
  267,813
Total liabilities and equity, $m
  2,562
  4,027
  6,178
  9,179
  13,239
  18,573
  25,402
  33,935
  44,364
  56,857
  71,550
  88,549
  107,927
  129,722
  153,949
  180,593
  209,627
  241,007
  274,681
  310,596
  348,698
  388,941
  431,284
  475,698
  522,165
  570,682
  621,258
  673,915
  728,694
  785,647
  844,837
Debt-to-equity ratio
  1.041
  1.430
  1.680
  1.840
  1.940
  2.000
  2.040
  2.070
  2.090
  2.100
  2.110
  2.120
  2.130
  2.130
  2.140
  2.140
  2.140
  2.140
  2.140
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
Adjusted equity ratio
  0.307
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  47
  108
  170
  254
  367
  512
  695
  921
  1,192
  1,513
  1,886
  2,353
  2,834
  3,369
  3,959
  4,602
  5,298
  6,045
  6,842
  7,687
  8,580
  9,520
  10,506
  11,537
  12,613
  13,735
  14,903
  16,117
  17,380
  18,692
  20,055
Depreciation, amort., depletion, $m
  103
  149
  199
  268
  362
  485
  643
  840
  1,082
  1,370
  1,710
  2,047
  2,495
  2,999
  3,559
  4,175
  4,846
  5,571
  6,349
  7,180
  8,060
  8,991
  9,969
  10,996
  12,070
  13,192
  14,361
  15,578
  16,844
  18,161
  19,529
Funds from operations, $m
  178
  257
  369
  523
  729
  997
  1,338
  1,761
  2,274
  2,884
  3,596
  4,400
  5,329
  6,368
  7,518
  8,777
  10,144
  11,616
  13,191
  14,867
  16,641
  18,511
  20,475
  22,533
  24,683
  26,927
  29,264
  31,695
  34,224
  36,853
  39,584
Change in working capital, $m
  13
  214
  308
  430
  582
  765
  979
  1,223
  1,495
  1,790
  2,106
  2,436
  2,777
  3,124
  3,472
  3,819
  4,161
  4,497
  4,826
  5,147
  5,461
  5,767
  6,069
  6,365
  6,660
  6,953
  7,248
  7,547
  7,851
  8,162
  8,483
Cash from operations, $m
  165
  44
  60
  92
  147
  233
  360
  538
  779
  1,093
  1,490
  1,964
  2,552
  3,244
  4,046
  4,958
  5,982
  7,119
  8,365
  9,720
  11,180
  12,743
  14,407
  16,168
  18,024
  19,973
  22,015
  24,149
  26,373
  28,690
  31,101
Maintenance CAPEX, $m
  0
  -59
  -93
  -143
  -212
  -306
  -429
  -587
  -784
  -1,026
  -1,314
  -1,654
  -2,047
  -2,495
  -2,999
  -3,559
  -4,175
  -4,846
  -5,571
  -6,349
  -7,180
  -8,060
  -8,991
  -9,969
  -10,996
  -12,070
  -13,192
  -14,361
  -15,578
  -16,844
  -18,161
New CAPEX, $m
  -95
  -429
  -617
  -860
  -1,163
  -1,529
  -1,957
  -2,446
  -2,989
  -3,581
  -4,212
  -4,873
  -5,554
  -6,247
  -6,944
  -7,637
  -8,322
  -8,995
  -9,652
  -10,294
  -10,922
  -11,535
  -12,137
  -12,731
  -13,319
  -13,907
  -14,497
  -15,094
  -15,702
  -16,324
  -16,966
Cash from investing activities, $m
  -191
  -488
  -710
  -1,003
  -1,375
  -1,835
  -2,386
  -3,033
  -3,773
  -4,607
  -5,526
  -6,527
  -7,601
  -8,742
  -9,943
  -11,196
  -12,497
  -13,841
  -15,223
  -16,643
  -18,102
  -19,595
  -21,128
  -22,700
  -24,315
  -25,977
  -27,689
  -29,455
  -31,280
  -33,168
  -35,127
Free cash flow, $m
  -26
  -444
  -649
  -911
  -1,229
  -1,602
  -2,027
  -2,495
  -2,995
  -3,513
  -4,036
  -4,563
  -5,049
  -5,498
  -5,897
  -6,238
  -6,514
  -6,722
  -6,858
  -6,924
  -6,921
  -6,852
  -6,721
  -6,533
  -6,292
  -6,004
  -5,673
  -5,306
  -4,906
  -4,478
  -4,026
Issuance/(repayment) of debt, $m
  88
  1,018
  1,469
  2,050
  2,772
  3,644
  4,664
  5,828
  7,123
  8,532
  10,036
  11,611
  13,235
  14,886
  16,546
  18,198
  19,830
  21,432
  23,000
  24,530
  26,024
  27,486
  28,920
  30,335
  31,737
  33,137
  34,543
  35,966
  37,414
  38,898
  40,427
Issuance/(repurchase) of shares, $m
  5
  364
  512
  697
  920
  1,179
  1,470
  1,784
  2,114
  2,447
  2,772
  3,035
  3,309
  3,540
  3,721
  3,844
  3,906
  3,903
  3,833
  3,698
  3,498
  3,237
  2,917
  2,542
  2,117
  1,645
  1,130
  575
  0
  0
  0
Cash from financing (excl. dividends), $m  
  93
  1,382
  1,981
  2,747
  3,692
  4,823
  6,134
  7,612
  9,237
  10,979
  12,808
  14,646
  16,544
  18,426
  20,267
  22,042
  23,736
  25,335
  26,833
  28,228
  29,522
  30,723
  31,837
  32,877
  33,854
  34,782
  35,673
  36,541
  37,414
  38,898
  40,427
Total cash flow (excl. dividends), $m
  68
  939
  1,332
  1,836
  2,464
  3,220
  4,107
  5,117
  6,242
  7,466
  8,772
  10,083
  11,494
  12,928
  14,370
  15,805
  17,222
  18,613
  19,974
  21,303
  22,601
  23,870
  25,116
  26,345
  27,563
  28,778
  29,999
  31,235
  32,508
  34,420
  36,401
Retained Cash Flow (-), $m
  9
  -473
  -682
  -951
  -1,287
  -1,691
  -2,165
  -2,705
  -3,306
  -3,960
  -4,658
  -5,389
  -6,143
  -6,909
  -7,680
  -8,446
  -9,204
  -9,947
  -10,675
  -11,385
  -12,079
  -12,757
  -13,423
  -14,079
  -14,730
  -15,380
  -16,032
  -16,693
  -17,365
  -18,054
  -18,764
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
 
  466
  650
  885
  1,177
  1,529
  1,942
  2,412
  2,936
  3,506
  4,114
  4,695
  5,351
  6,019
  6,690
  7,358
  8,018
  8,666
  9,300
  9,918
  10,522
  11,113
  11,694
  12,265
  12,833
  13,398
  13,967
  14,542
  15,143
  16,366
  17,638
Discount rate, %
 
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
 
  432
  553
  687
  826
  962
  1,084
  1,183
  1,251
  1,283
  1,277
  1,220
  1,148
  1,051
  936
  811
  684
  562
  449
  350
  265
  195
  140
  97
  66
  43
  27
  17
  10
  6
  3
Current shareholders' claim on cash, %
  100
  91.2
  84.1
  78.2
  73.3
  69.1
  65.7
  62.7
  60.2
  58.1
  56.2
  54.7
  53.4
  52.2
  51.2
  50.4
  49.7
  49.1
  48.5
  48.1
  47.7
  47.4
  47.2
  47.0
  46.9
  46.8
  46.7
  46.7
  46.7
  46.7
  46.7

Parkland Fuel Corporation distributes and markets fuels and lubricants. The Company delivers refined fuels and other petroleum products to motorists, businesses, consumers and wholesale customers. Its segments include Retail Fuels, Commercial Fuels, Parkland USA, Supply and Wholesale, and Corporate. Its Retail Fuels segment supplies and supports a network of over 1,070 retail gas stations in Canada. Its Commercial Fuels segment delivers bulk fuel, propane, heating oil, lubricants, agricultural inputs and other related products and services. Its Parkland USA segment supplies and distributes refined petroleum products in North Dakota, Montana, Minnesota, South Dakota and Wyoming. Its Supply and Wholesale segment manages fuel supply by contracting and purchasing fuel from refiners and other suppliers, distributing through third-party rail and highway carriers, storing fuel in owned and leased facilities and serving wholesale and reseller customers in Canada and in the United States.

FINANCIAL RATIOS  of  Parkland Fuel Corporation (PKI)

Valuation Ratios
P/E Ratio 59.2
Price to Sales 0.4
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 16.9
Price to Free Cash Flow 39.8
Growth Rates
Sales Growth Rate -0.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 30.1%
Cap. Spend. - 3 Yr. Gr. Rate 11.1%
Financial Strength
Quick Ratio 0
Current Ratio 0.5
LT Debt to Equity 66.9%
Total Debt to Equity 104.1%
Interest Coverage 3
Management Effectiveness
Return On Assets 3%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital 3.2%
Ret/ On T. Cap. - 3 Yr. Avg. 4%
Return On Equity 5.8%
Return On Equity - 3 Yr. Avg. 7.2%
Asset Turnover 2.9
Profitability Ratios
Gross Margin 11.4%
Gross Margin - 3 Yr. Avg. 9.5%
EBITDA Margin 3.1%
EBITDA Margin - 3 Yr. Avg. 2.7%
Operating Margin 2%
Oper. Margin - 3 Yr. Avg. 1.5%
Pre-Tax Margin 1.1%
Pre-Tax Margin - 3 Yr. Avg. 1%
Net Profit Margin 0.8%
Net Profit Margin - 3 Yr. Avg. 0.7%
Effective Tax Rate 29.9%
Eff/ Tax Rate - 3 Yr. Avg. 30.6%
Payout Ratio 136.2%

PKI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PKI stock intrinsic value calculation we used $6266 million for the last fiscal year's total revenue generated by Parkland Fuel Corporation. The default revenue input number comes from 2016 income statement of Parkland Fuel Corporation. 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 PKI stock valuation model: a) initial revenue growth rate of 58.8% 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 8%, whose default value for PKI is calculated based on our internal credit rating of Parkland Fuel Corporation, 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 Parkland Fuel Corporation.
    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 PKI stock the variable cost ratio is equal to 98.5%.

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 PKI 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 4.2% for Parkland Fuel Corporation.

Corporate tax rate of 27% is the nominal tax rate for Parkland Fuel Corporation. 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 PKI 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 PKI are equal to 11.6%.

Life of production assets of 12.4 years is the average useful life of capital assets used in Parkland Fuel Corporation 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 PKI is equal to 5.8%. 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 - $804 million for Parkland Fuel Corporation - 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 131.099 million for Parkland Fuel Corporation 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 Parkland Fuel Corporation at the current share price and the inputted number of shares is $3.8 billion.

RELATED COMPANIES Price Int.Val. Rating
GEI Gibson Energy 16.75 1.05  str.sell
SPB Superior Plus 12.63 1.27  str.sell
SU Suncor Energy 43.18 6.75  str.sell
KEY Keyera Corp. 33.32 2.19  str.sell
CNQ Canadian Natur 40.06 5.39  str.sell
POU Paramount Reso 17.63 3.03  str.sell
IMO Imperial Oil L 34.36 35.17  hold
Financial statements of PKI
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.