Intrinsic value of Russel Metals Inc. - RUS

Previous Close

$27.17

  Intrinsic Value

$3.22

stock screener

  Rating & Target

str. sell

-88%

  Value-price divergence*

0%

Previous close

$27.17

 
Intrinsic value

$3.22

 
Up/down potential

-88%

 
Rating

str. sell

 
Value-price divergence*

0%

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

We calculate the intrinsic value of RUS 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 1.7

 

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, %
  -17.13
  30.90
  28.31
  25.98
  23.88
  21.99
  20.29
  18.76
  17.39
  16.15
  15.03
  14.03
  13.13
  12.31
  11.58
  10.93
  10.33
  9.80
  9.32
  8.89
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
Revenue, $m
  2,579
  3,376
  4,332
  5,457
  6,760
  8,247
  9,920
  11,782
  13,831
  16,064
  18,479
  21,072
  23,838
  26,774
  29,875
  33,139
  36,563
  40,146
  43,888
  47,788
  51,850
  56,075
  60,468
  65,033
  69,778
  74,708
  79,833
  85,160
  90,701
  96,465
  102,465
Variable operating expenses, $m
 
  3,470
  4,451
  5,607
  6,945
  8,472
  10,191
  12,102
  14,206
  16,500
  18,980
  21,640
  24,481
  27,496
  30,681
  34,032
  37,549
  41,228
  45,071
  49,076
  53,247
  57,586
  62,097
  66,786
  71,658
  76,722
  81,984
  87,456
  93,146
  99,065
  105,227
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
  2,460
  3,470
  4,451
  5,607
  6,945
  8,472
  10,191
  12,102
  14,206
  16,500
  18,980
  21,640
  24,481
  27,496
  30,681
  34,032
  37,549
  41,228
  45,071
  49,076
  53,247
  57,586
  62,097
  66,786
  71,658
  76,722
  81,984
  87,456
  93,146
  99,065
  105,227
Operating income, $m
  119
  -94
  -119
  -150
  -185
  -225
  -270
  -320
  -375
  -436
  -501
  -568
  -643
  -722
  -805
  -893
  -985
  -1,082
  -1,183
  -1,288
  -1,398
  -1,511
  -1,630
  -1,753
  -1,881
  -2,014
  -2,152
  -2,295
  -2,445
  -2,600
  -2,762
EBITDA, $m
  154
  -49
  -63
  -79
  -98
  -120
  -144
  -171
  -201
  -233
  -268
  -306
  -346
  -388
  -433
  -481
  -530
  -582
  -637
  -693
  -752
  -813
  -877
  -943
  -1,012
  -1,084
  -1,158
  -1,235
  -1,316
  -1,399
  -1,486
Interest expense (income), $m
  23
  19
  32
  47
  65
  86
  110
  137
  167
  200
  236
  275
  317
  361
  409
  459
  511
  566
  624
  684
  747
  813
  881
  951
  1,025
  1,101
  1,181
  1,263
  1,349
  1,438
  1,531
Earnings before tax, $m
  97
  -113
  -151
  -197
  -250
  -311
  -380
  -457
  -543
  -636
  -737
  -843
  -959
  -1,083
  -1,214
  -1,352
  -1,497
  -1,648
  -1,807
  -1,972
  -2,145
  -2,324
  -2,510
  -2,704
  -2,906
  -3,115
  -3,332
  -3,559
  -3,794
  -4,038
  -4,293
Tax expense, $m
  34
  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
  63
  -113
  -151
  -197
  -250
  -311
  -380
  -457
  -543
  -636
  -737
  -843
  -959
  -1,083
  -1,214
  -1,352
  -1,497
  -1,648
  -1,807
  -1,972
  -2,145
  -2,324
  -2,510
  -2,704
  -2,906
  -3,115
  -3,332
  -3,559
  -3,794
  -4,038
  -4,293

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  182
  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
  1,509
  1,737
  2,229
  2,809
  3,479
  4,244
  5,106
  6,064
  7,118
  8,268
  9,511
  10,845
  12,269
  13,780
  15,376
  17,056
  18,818
  20,662
  22,588
  24,595
  26,685
  28,860
  31,121
  33,471
  35,912
  38,450
  41,087
  43,829
  46,681
  49,648
  52,736
Adjusted assets (=assets-cash), $m
  1,327
  1,737
  2,229
  2,809
  3,479
  4,244
  5,106
  6,064
  7,118
  8,268
  9,511
  10,845
  12,269
  13,780
  15,376
  17,056
  18,818
  20,662
  22,588
  24,595
  26,685
  28,860
  31,121
  33,471
  35,912
  38,450
  41,087
  43,829
  46,681
  49,648
  52,736
Revenue / Adjusted assets
  1.943
  1.944
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
  1.943
Average production assets, $m
  315
  412
  528
  666
  825
  1,006
  1,210
  1,437
  1,687
  1,960
  2,254
  2,571
  2,908
  3,266
  3,645
  4,043
  4,461
  4,898
  5,354
  5,830
  6,326
  6,841
  7,377
  7,934
  8,513
  9,114
  9,740
  10,390
  11,066
  11,769
  12,501
Working capital, $m
  818
  878
  1,126
  1,419
  1,758
  2,144
  2,579
  3,063
  3,596
  4,177
  4,805
  5,479
  6,198
  6,961
  7,768
  8,616
  9,506
  10,438
  11,411
  12,425
  13,481
  14,579
  15,722
  16,909
  18,142
  19,424
  20,757
  22,142
  23,582
  25,081
  26,641
Total debt, $m
  331
  497
  737
  1,020
  1,348
  1,723
  2,144
  2,612
  3,128
  3,690
  4,298
  4,950
  5,646
  6,385
  7,166
  7,987
  8,849
  9,751
  10,692
  11,674
  12,696
  13,759
  14,865
  16,014
  17,208
  18,449
  19,739
  21,080
  22,474
  23,925
  25,435
Total liabilities, $m
  683
  850
  1,090
  1,373
  1,701
  2,076
  2,497
  2,965
  3,481
  4,043
  4,651
  5,303
  5,999
  6,738
  7,519
  8,340
  9,202
  10,104
  11,045
  12,027
  13,049
  14,112
  15,218
  16,367
  17,561
  18,802
  20,092
  21,433
  22,827
  24,278
  25,788
Total equity, $m
  825
  888
  1,139
  1,435
  1,778
  2,169
  2,609
  3,099
  3,637
  4,225
  4,860
  5,542
  6,269
  7,041
  7,857
  8,715
  9,616
  10,558
  11,542
  12,568
  13,636
  14,747
  15,903
  17,103
  18,351
  19,648
  20,996
  22,397
  23,854
  25,370
  26,948
Total liabilities and equity, $m
  1,508
  1,738
  2,229
  2,808
  3,479
  4,245
  5,106
  6,064
  7,118
  8,268
  9,511
  10,845
  12,268
  13,779
  15,376
  17,055
  18,818
  20,662
  22,587
  24,595
  26,685
  28,859
  31,121
  33,470
  35,912
  38,450
  41,088
  43,830
  46,681
  49,648
  52,736
Debt-to-equity ratio
  0.401
  0.560
  0.650
  0.710
  0.760
  0.790
  0.820
  0.840
  0.860
  0.870
  0.880
  0.890
  0.900
  0.910
  0.910
  0.920
  0.920
  0.920
  0.930
  0.930
  0.930
  0.930
  0.930
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
Adjusted equity ratio
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  63
  -113
  -151
  -197
  -250
  -311
  -380
  -457
  -543
  -636
  -737
  -843
  -959
  -1,083
  -1,214
  -1,352
  -1,497
  -1,648
  -1,807
  -1,972
  -2,145
  -2,324
  -2,510
  -2,704
  -2,906
  -3,115
  -3,332
  -3,559
  -3,794
  -4,038
  -4,293
Depreciation, amort., depletion, $m
  35
  45
  57
  71
  87
  105
  126
  149
  175
  203
  233
  262
  297
  333
  372
  413
  455
  500
  546
  595
  645
  698
  753
  810
  869
  930
  994
  1,060
  1,129
  1,201
  1,276
Funds from operations, $m
  227
  -68
  -95
  -126
  -163
  -206
  -254
  -308
  -368
  -433
  -504
  -581
  -663
  -750
  -842
  -939
  -1,042
  -1,149
  -1,261
  -1,377
  -1,499
  -1,626
  -1,758
  -1,895
  -2,037
  -2,185
  -2,339
  -2,498
  -2,665
  -2,837
  -3,017
Change in working capital, $m
  55
  207
  248
  293
  339
  387
  435
  484
  533
  581
  628
  674
  719
  763
  806
  849
  890
  932
  973
  1,014
  1,056
  1,099
  1,142
  1,187
  1,234
  1,282
  1,332
  1,385
  1,441
  1,499
  1,560
Cash from operations, $m
  172
  -275
  -343
  -419
  -502
  -592
  -689
  -792
  -900
  -1,014
  -1,132
  -1,255
  -1,382
  -1,513
  -1,648
  -1,788
  -1,932
  -2,080
  -2,233
  -2,392
  -2,555
  -2,724
  -2,900
  -3,082
  -3,271
  -3,467
  -3,671
  -3,884
  -4,105
  -4,336
  -4,577
Maintenance CAPEX, $m
  0
  -32
  -42
  -54
  -68
  -84
  -103
  -123
  -147
  -172
  -200
  -230
  -262
  -297
  -333
  -372
  -413
  -455
  -500
  -546
  -595
  -645
  -698
  -753
  -810
  -869
  -930
  -994
  -1,060
  -1,129
  -1,201
New CAPEX, $m
  -17
  -97
  -117
  -137
  -159
  -181
  -204
  -227
  -250
  -272
  -295
  -316
  -337
  -358
  -378
  -398
  -418
  -437
  -456
  -476
  -495
  -515
  -536
  -557
  -579
  -602
  -625
  -650
  -676
  -703
  -732
Cash from investing activities, $m
  26
  -129
  -159
  -191
  -227
  -265
  -307
  -350
  -397
  -444
  -495
  -546
  -599
  -655
  -711
  -770
  -831
  -892
  -956
  -1,022
  -1,090
  -1,160
  -1,234
  -1,310
  -1,389
  -1,471
  -1,555
  -1,644
  -1,736
  -1,832
  -1,933
Free cash flow, $m
  198
  -405
  -502
  -610
  -729
  -858
  -996
  -1,143
  -1,297
  -1,459
  -1,627
  -1,801
  -1,982
  -2,168
  -2,360
  -2,558
  -2,762
  -2,972
  -3,190
  -3,414
  -3,646
  -3,885
  -4,134
  -4,391
  -4,659
  -4,937
  -5,226
  -5,527
  -5,841
  -6,169
  -6,510
Issuance/(repayment) of debt, $m
  -60
  201
  241
  283
  328
  374
  421
  468
  516
  562
  608
  653
  696
  739
  781
  821
  862
  902
  942
  982
  1,022
  1,063
  1,106
  1,149
  1,194
  1,241
  1,290
  1,341
  1,394
  1,451
  1,510
Issuance/(repurchase) of shares, $m
  1
  322
  403
  493
  593
  702
  820
  947
  1,081
  1,223
  1,372
  1,525
  1,687
  1,855
  2,030
  2,210
  2,397
  2,591
  2,791
  2,998
  3,213
  3,435
  3,666
  3,905
  4,153
  4,412
  4,680
  4,960
  5,251
  5,554
  5,871
Cash from financing (excl. dividends), $m  
  -59
  523
  644
  776
  921
  1,076
  1,241
  1,415
  1,597
  1,785
  1,980
  2,178
  2,383
  2,594
  2,811
  3,031
  3,259
  3,493
  3,733
  3,980
  4,235
  4,498
  4,772
  5,054
  5,347
  5,653
  5,970
  6,301
  6,645
  7,005
  7,381
Total cash flow (excl. dividends), $m
  132
  119
  141
  166
  192
  218
  246
  273
  300
  327
  353
  376
  401
  426
  450
  474
  497
  520
  543
  566
  589
  613
  637
  663
  689
  715
  744
  773
  804
  837
  871
Retained Cash Flow (-), $m
  44
  -322
  -403
  -493
  -593
  -702
  -820
  -947
  -1,081
  -1,223
  -1,372
  -1,525
  -1,687
  -1,855
  -2,030
  -2,210
  -2,397
  -2,591
  -2,791
  -2,998
  -3,213
  -3,435
  -3,666
  -3,905
  -4,153
  -4,412
  -4,680
  -4,960
  -5,251
  -5,554
  -5,871
Prev. year cash balance distribution, $m
 
  147
  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
 
  -57
  -261
  -327
  -401
  -484
  -575
  -674
  -781
  -896
  -1,019
  -1,149
  -1,285
  -1,429
  -1,579
  -1,737
  -1,900
  -2,071
  -2,248
  -2,432
  -2,623
  -2,822
  -3,028
  -3,242
  -3,465
  -3,696
  -3,937
  -4,187
  -4,447
  -4,718
  -5,000
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
 
  -55
  -239
  -284
  -330
  -375
  -417
  -455
  -488
  -515
  -534
  -545
  -549
  -543
  -530
  -510
  -483
  -451
  -414
  -374
  -333
  -292
  -251
  -213
  -176
  -144
  -115
  -90
  -69
  -52
  -38
Current shareholders' claim on cash, %
  100
  81.1
  66.4
  54.7
  45.5
  38.1
  32.2
  27.3
  23.3
  20.0
  17.3
  15.0
  13.0
  11.4
  10.0
  8.8
  7.7
  6.8
  6.0
  5.4
  4.8
  4.2
  3.8
  3.4
  3.0
  2.7
  2.4
  2.2
  1.9
  1.7
  1.6

Russel Metals Inc. is a metals distribution and processing company. The Company primarily distributes steel products. The Company operates through three segments: metals service centers, energy products and steel distributors. The Company provides processing and distribution services to a base of approximately 43,000 end users through a network of 50 locations in Canada and 14 locations in the United States. The Company's network of metals service centers carries a line of metal products in a range of sizes, shapes and specifications, including carbon hot rolled and cold finished steel, pipe and tubular products, stainless steel, aluminum and other non-ferrous specialty metals. The Company's energy products operations distribute oil country tubular goods (OCTG), line pipe, tubes, flanges, valves and fittings to the energy industry. The Company's steel distributors segment is engaged in selling steel to other steel service centers and equipment manufacturers.

FINANCIAL RATIOS  of  Russel Metals Inc. (RUS)

Valuation Ratios
P/E Ratio 26.6
Price to Sales 0.7
Price to Book 2
Price to Tangible Book
Price to Cash Flow 9.8
Price to Free Cash Flow 10.8
Growth Rates
Sales Growth Rate -17.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55.3%
Cap. Spend. - 3 Yr. Gr. Rate -8.8%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 35.9%
Total Debt to Equity 40.1%
Interest Coverage 5
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 5.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.5%
Return On Equity 7.4%
Return On Equity - 3 Yr. Avg. 3.8%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 19.5%
Gross Margin - 3 Yr. Avg. 17.8%
EBITDA Margin 6%
EBITDA Margin - 3 Yr. Avg. 3.9%
Operating Margin 4.6%
Oper. Margin - 3 Yr. Avg. 2.5%
Pre-Tax Margin 3.8%
Pre-Tax Margin - 3 Yr. Avg. 1.7%
Net Profit Margin 2.4%
Net Profit Margin - 3 Yr. Avg. 0.9%
Effective Tax Rate 35.1%
Eff/ Tax Rate - 3 Yr. Avg. 25.5%
Payout Ratio 149.2%

RUS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RUS stock intrinsic value calculation we used $2579 million for the last fiscal year's total revenue generated by Russel Metals Inc.. The default revenue input number comes from 2016 income statement of Russel Metals 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 RUS stock valuation model: a) initial revenue growth rate of 30.9% 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 RUS is calculated based on our internal credit rating of Russel Metals 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 Russel Metals 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 RUS stock the variable cost ratio is equal to 102.8%.

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 RUS 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 6.4% for Russel Metals Inc..

Corporate tax rate of 27% is the nominal tax rate for Russel Metals 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 RUS 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 RUS are equal to 12.2%.

Life of production assets of 9.8 years is the average useful life of capital assets used in Russel Metals 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 RUS is equal to 26%. 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 - $825 million for Russel Metals 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 61.967 million for Russel Metals 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 Russel Metals Inc. at the current share price and the inputted number of shares is $1.7 billion.

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Financial statements of RUS
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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