Intrinsic value of Berry Plastics Group - BERY

Previous Close

$58.27

  Intrinsic Value

$47.88

stock screener

  Rating & Target

hold

-18%

  Value-price divergence*

+2561%

Previous close

$58.27

 
Intrinsic value

$47.88

 
Up/down potential

-18%

 
Rating

hold

 
Value-price divergence*

+2561%

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

We calculate the intrinsic value of BERY 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 7.5

 

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, %
  32.94
  11.90
  11.21
  10.59
  10.03
  9.53
  9.07
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
Revenue, $m
  6,489
  7,261
  8,075
  8,930
  9,826
  10,762
  11,739
  12,756
  13,815
  14,916
  16,060
  17,250
  18,486
  19,770
  21,106
  22,494
  23,938
  25,441
  27,006
  28,636
  30,335
  32,106
  33,954
  35,882
  37,896
  39,999
  42,197
  44,495
  46,899
  49,413
  52,044
Variable operating expenses, $m
 
  6,042
  6,692
  7,375
  8,091
  8,839
  9,619
  10,432
  11,278
  12,157
  13,072
  13,781
  14,769
  15,795
  16,862
  17,971
  19,125
  20,326
  21,576
  22,878
  24,235
  25,650
  27,126
  28,667
  30,276
  31,956
  33,712
  35,548
  37,468
  39,477
  41,579
Fixed operating expenses, $m
 
  508
  521
  534
  547
  561
  575
  590
  604
  619
  635
  651
  667
  684
  701
  718
  736
  755
  774
  793
  813
  833
  854
  875
  897
  920
  943
  966
  990
  1,015
  1,040
Total operating expenses, $m
  5,912
  6,550
  7,213
  7,909
  8,638
  9,400
  10,194
  11,022
  11,882
  12,776
  13,707
  14,432
  15,436
  16,479
  17,563
  18,689
  19,861
  21,081
  22,350
  23,671
  25,048
  26,483
  27,980
  29,542
  31,173
  32,876
  34,655
  36,514
  38,458
  40,492
  42,619
Operating income, $m
  577
  711
  862
  1,021
  1,188
  1,362
  1,545
  1,735
  1,933
  2,139
  2,354
  2,818
  3,050
  3,292
  3,543
  3,805
  4,077
  4,361
  4,657
  4,965
  5,287
  5,623
  5,973
  6,340
  6,723
  7,123
  7,542
  7,981
  8,440
  8,921
  9,425
EBITDA, $m
  1,102
  1,254
  1,439
  1,634
  1,838
  2,052
  2,275
  2,507
  2,750
  3,002
  3,264
  3,537
  3,821
  4,116
  4,423
  4,743
  5,075
  5,422
  5,783
  6,159
  6,552
  6,962
  7,389
  7,836
  8,303
  8,791
  9,302
  9,836
  10,396
  10,981
  11,595
Interest expense (income), $m
  0
  201
  211
  241
  273
  306
  341
  377
  415
  454
  495
  538
  582
  628
  676
  725
  777
  830
  886
  944
  1,005
  1,068
  1,134
  1,202
  1,274
  1,349
  1,427
  1,509
  1,594
  1,683
  1,777
Earnings before tax, $m
  308
  510
  651
  780
  915
  1,056
  1,204
  1,358
  1,518
  1,685
  1,859
  2,280
  2,468
  2,664
  2,867
  3,080
  3,300
  3,531
  3,771
  4,021
  4,282
  4,555
  4,840
  5,137
  5,449
  5,775
  6,115
  6,472
  6,846
  7,238
  7,648
Tax expense, $m
  72
  138
  176
  211
  247
  285
  325
  367
  410
  455
  502
  616
  666
  719
  774
  831
  891
  953
  1,018
  1,086
  1,156
  1,230
  1,307
  1,387
  1,471
  1,559
  1,651
  1,748
  1,848
  1,954
  2,065
Net income, $m
  236
  372
  475
  569
  668
  771
  879
  991
  1,108
  1,230
  1,357
  1,664
  1,802
  1,945
  2,093
  2,248
  2,409
  2,577
  2,752
  2,935
  3,126
  3,325
  3,533
  3,750
  3,978
  4,215
  4,464
  4,725
  4,998
  5,283
  5,583

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  323
  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
  7,653
  8,563
  9,523
  10,531
  11,587
  12,691
  13,843
  15,043
  16,291
  17,590
  18,939
  20,342
  21,799
  23,314
  24,889
  26,526
  28,229
  30,002
  31,847
  33,769
  35,772
  37,861
  40,040
  42,314
  44,688
  47,169
  49,761
  52,471
  55,305
  58,270
  61,373
Adjusted assets (=assets-cash), $m
  7,330
  8,563
  9,523
  10,531
  11,587
  12,691
  13,843
  15,043
  16,291
  17,590
  18,939
  20,342
  21,799
  23,314
  24,889
  26,526
  28,229
  30,002
  31,847
  33,769
  35,772
  37,861
  40,040
  42,314
  44,688
  47,169
  49,761
  52,471
  55,305
  58,270
  61,373
Revenue / Adjusted assets
  0.885
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
  0.848
Average production assets, $m
  2,706
  3,028
  3,367
  3,724
  4,097
  4,488
  4,895
  5,319
  5,761
  6,220
  6,697
  7,193
  7,709
  8,244
  8,801
  9,380
  9,982
  10,609
  11,262
  11,941
  12,650
  13,388
  14,159
  14,963
  15,803
  16,680
  17,596
  18,555
  19,557
  20,605
  21,702
Working capital, $m
  761
  537
  598
  661
  727
  796
  869
  944
  1,022
  1,104
  1,188
  1,276
  1,368
  1,463
  1,562
  1,665
  1,771
  1,883
  1,998
  2,119
  2,245
  2,376
  2,513
  2,655
  2,804
  2,960
  3,123
  3,293
  3,470
  3,657
  3,851
Total debt, $m
  5,755
  6,026
  6,890
  7,798
  8,748
  9,742
  10,779
  11,858
  12,982
  14,151
  15,365
  16,628
  17,939
  19,303
  20,720
  22,193
  23,726
  25,321
  26,982
  28,712
  30,515
  32,395
  34,356
  36,403
  38,540
  40,772
  43,105
  45,544
  48,094
  50,763
  53,555
Total liabilities, $m
  7,435
  7,706
  8,570
  9,478
  10,428
  11,422
  12,459
  13,538
  14,662
  15,831
  17,045
  18,308
  19,619
  20,983
  22,400
  23,873
  25,406
  27,001
  28,662
  30,392
  32,195
  34,075
  36,036
  38,083
  40,220
  42,452
  44,785
  47,224
  49,774
  52,443
  55,235
Total equity, $m
  218
  856
  952
  1,053
  1,159
  1,269
  1,384
  1,504
  1,629
  1,759
  1,894
  2,034
  2,180
  2,331
  2,489
  2,653
  2,823
  3,000
  3,185
  3,377
  3,577
  3,786
  4,004
  4,231
  4,469
  4,717
  4,976
  5,247
  5,530
  5,827
  6,137
Total liabilities and equity, $m
  7,653
  8,562
  9,522
  10,531
  11,587
  12,691
  13,843
  15,042
  16,291
  17,590
  18,939
  20,342
  21,799
  23,314
  24,889
  26,526
  28,229
  30,001
  31,847
  33,769
  35,772
  37,861
  40,040
  42,314
  44,689
  47,169
  49,761
  52,471
  55,304
  58,270
  61,372
Debt-to-equity ratio
  26.399
  7.040
  7.240
  7.400
  7.550
  7.680
  7.790
  7.880
  7.970
  8.040
  8.110
  8.170
  8.230
  8.280
  8.320
  8.370
  8.400
  8.440
  8.470
  8.500
  8.530
  8.560
  8.580
  8.600
  8.620
  8.640
  8.660
  8.680
  8.700
  8.710
  8.730
Adjusted equity ratio
  -0.014
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  236
  372
  475
  569
  668
  771
  879
  991
  1,108
  1,230
  1,357
  1,664
  1,802
  1,945
  2,093
  2,248
  2,409
  2,577
  2,752
  2,935
  3,126
  3,325
  3,533
  3,750
  3,978
  4,215
  4,464
  4,725
  4,998
  5,283
  5,583
Depreciation, amort., depletion, $m
  525
  543
  577
  613
  650
  689
  730
  773
  817
  863
  910
  719
  771
  824
  880
  938
  998
  1,061
  1,126
  1,194
  1,265
  1,339
  1,416
  1,496
  1,580
  1,668
  1,760
  1,855
  1,956
  2,061
  2,170
Funds from operations, $m
  902
  915
  1,053
  1,182
  1,318
  1,460
  1,609
  1,764
  1,925
  2,093
  2,267
  2,384
  2,573
  2,769
  2,973
  3,186
  3,408
  3,638
  3,879
  4,129
  4,391
  4,664
  4,949
  5,247
  5,558
  5,883
  6,224
  6,580
  6,953
  7,344
  7,753
Change in working capital, $m
  45
  57
  60
  63
  66
  69
  72
  75
  78
  81
  85
  88
  91
  95
  99
  103
  107
  111
  116
  121
  126
  131
  137
  143
  149
  156
  163
  170
  178
  186
  195
Cash from operations, $m
  857
  858
  992
  1,119
  1,252
  1,391
  1,536
  1,688
  1,846
  2,011
  2,182
  2,296
  2,481
  2,674
  2,875
  3,083
  3,301
  3,527
  3,763
  4,009
  4,265
  4,533
  4,812
  5,104
  5,409
  5,728
  6,061
  6,410
  6,775
  7,158
  7,558
Maintenance CAPEX, $m
  0
  -271
  -303
  -337
  -372
  -410
  -449
  -490
  -532
  -576
  -622
  -670
  -719
  -771
  -824
  -880
  -938
  -998
  -1,061
  -1,126
  -1,194
  -1,265
  -1,339
  -1,416
  -1,496
  -1,580
  -1,668
  -1,760
  -1,855
  -1,956
  -2,061
New CAPEX, $m
  -288
  -322
  -339
  -357
  -374
  -390
  -407
  -424
  -442
  -459
  -477
  -496
  -515
  -536
  -557
  -579
  -602
  -627
  -653
  -680
  -708
  -739
  -770
  -804
  -840
  -877
  -917
  -958
  -1,002
  -1,048
  -1,097
Cash from investing activities, $m
  -2,579
  -593
  -642
  -694
  -746
  -800
  -856
  -914
  -974
  -1,035
  -1,099
  -1,166
  -1,234
  -1,307
  -1,381
  -1,459
  -1,540
  -1,625
  -1,714
  -1,806
  -1,902
  -2,004
  -2,109
  -2,220
  -2,336
  -2,457
  -2,585
  -2,718
  -2,857
  -3,004
  -3,158
Free cash flow, $m
  -1,722
  265
  350
  426
  506
  591
  680
  774
  873
  976
  1,083
  1,130
  1,246
  1,367
  1,493
  1,624
  1,760
  1,902
  2,049
  2,203
  2,363
  2,529
  2,703
  2,884
  3,073
  3,270
  3,477
  3,692
  3,918
  4,154
  4,401
Issuance/(repayment) of debt, $m
  1,966
  271
  864
  908
  951
  994
  1,036
  1,080
  1,124
  1,169
  1,215
  1,262
  1,312
  1,363
  1,417
  1,474
  1,533
  1,595
  1,661
  1,730
  1,803
  1,880
  1,961
  2,047
  2,137
  2,232
  2,333
  2,439
  2,551
  2,668
  2,793
Issuance/(repurchase) of shares, $m
  26
  266
  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  
  1,817
  537
  864
  908
  951
  994
  1,036
  1,080
  1,124
  1,169
  1,215
  1,262
  1,312
  1,363
  1,417
  1,474
  1,533
  1,595
  1,661
  1,730
  1,803
  1,880
  1,961
  2,047
  2,137
  2,232
  2,333
  2,439
  2,551
  2,668
  2,793
Total cash flow (excl. dividends), $m
  95
  803
  1,214
  1,333
  1,457
  1,584
  1,717
  1,854
  1,997
  2,144
  2,298
  2,392
  2,558
  2,731
  2,910
  3,098
  3,293
  3,497
  3,710
  3,933
  4,166
  4,409
  4,664
  4,931
  5,210
  5,503
  5,810
  6,131
  6,468
  6,822
  7,193
Retained Cash Flow (-), $m
  -286
  -638
  -96
  -101
  -106
  -110
  -115
  -120
  -125
  -130
  -135
  -140
  -146
  -151
  -157
  -164
  -170
  -177
  -185
  -192
  -200
  -209
  -218
  -227
  -237
  -248
  -259
  -271
  -283
  -296
  -310
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
 
  165
  1,118
  1,232
  1,351
  1,474
  1,602
  1,734
  1,872
  2,015
  2,163
  2,252
  2,412
  2,579
  2,753
  2,934
  3,123
  3,320
  3,526
  3,741
  3,965
  4,200
  4,446
  4,703
  4,973
  5,255
  5,550
  5,860
  6,185
  6,526
  6,883
Discount rate, %
 
  12.80
  13.44
  14.11
  14.82
  15.56
  16.34
  17.15
  18.01
  18.91
  19.86
  20.85
  21.89
  22.99
  24.14
  25.34
  26.61
  27.94
  29.34
  30.80
  32.34
  33.96
  35.66
  37.44
  39.32
  41.28
  43.35
  45.51
  47.79
  50.18
  52.69
PV of cash for distribution, $m
 
  146
  869
  829
  777
  715
  646
  573
  498
  424
  354
  280
  224
  175
  133
  99
  72
  50
  34
  23
  15
  9
  5
  3
  2
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1
  89.1

Berry Plastics Group, Inc. manufactures and distributes plastic consumer packaging and engineered materials in the United States, Canada, Mexico, Belgium, France, Spain, the United Kingdom, Italy, Germany, Australia, Brazil, Argentina, Colombia, Malaysia, India, China, and the Netherlands. The company operates through three segments: Health, Hygiene & Specialties; Consumer Packaging; and Engineered Materials. It offers containers; foodservice products, such as thermoformed polypropylene and injection-molded plastic drink cups; closures and over caps comprising continuous-thread and child-resistant closures, as well as aerosol over caps; bottle and prescription containers; and extruded and laminate tubes. The company also provides engineered materials, including corrosion protection products; and cloth and foil, splicing and laminating, flame-retardant, vinyl-coated and carton sealing, electrical, double-faced cloth, masking, mounting, OEM, and medical and specialty tapes. The company’s engineered materials also consists of drop cloths and retail trash bags; polyvinyl chloride films and boxed products; trash-can liners and food bags; and stretch and shrink films. In addition, it offers flexible packaging products, such as personal care films; food and consumer films, as well as barrier films; and converter films, including coated and laminated products, as well as a range of products for the food, healthcare, and personal care markets. The company sells its products through direct sales force and distributors. Berry Plastics Group, Inc. was founded in 1967 and is headquartered in Evansville, Indiana.

FINANCIAL RATIOS  of  Berry Plastics Group (BERY)

Valuation Ratios
P/E Ratio 30.1
Price to Sales 1.1
Price to Book 32.6
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow 12.5
Growth Rates
Sales Growth Rate 32.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 60%
Cap. Spend. - 3 Yr. Gr. Rate 3.8%
Financial Strength
Quick Ratio 8
Current Ratio 0
LT Debt to Equity 2620.2%
Total Debt to Equity 2639.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 3.7%
Ret/ On Assets - 3 Yr. Avg. 2.2%
Return On Total Capital 4.9%
Ret/ On T. Cap. - 3 Yr. Avg. 3%
Return On Equity 314.7%
Return On Equity - 3 Yr. Avg. 60.8%
Asset Turnover 1
Profitability Ratios
Gross Margin 19.8%
Gross Margin - 3 Yr. Avg. 17.7%
EBITDA Margin 12.8%
EBITDA Margin - 3 Yr. Avg. 10.4%
Operating Margin 8.9%
Oper. Margin - 3 Yr. Avg. 7%
Pre-Tax Margin 4.7%
Pre-Tax Margin - 3 Yr. Avg. 2.9%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 2.2%
Effective Tax Rate 23.4%
Eff/ Tax Rate - 3 Yr. Avg. 19.6%
Payout Ratio 0%

BERY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BERY stock intrinsic value calculation we used $6489 million for the last fiscal year's total revenue generated by Berry Plastics Group. The default revenue input number comes from 2016 income statement of Berry Plastics Group. 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 BERY stock valuation model: a) initial revenue growth rate of 11.9% 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 12.8%, whose default value for BERY is calculated based on our internal credit rating of Berry Plastics Group, 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 Berry Plastics Group.
    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 BERY stock the variable cost ratio is equal to 83.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $496 million in the base year in the intrinsic value calculation for BERY 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 Berry Plastics Group.

Corporate tax rate of 27% is the nominal tax rate for Berry Plastics Group. 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 BERY 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 BERY are equal to 41.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Berry Plastics Group 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 BERY is equal to 7.4%. 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 - $218 million for Berry Plastics Group - 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 129.513 million for Berry Plastics Group 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 Berry Plastics Group at the current share price and the inputted number of shares is $7.5 billion.

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COMPANY NEWS

▶ Berry Global beats 3Q profit forecasts   [02:29AM  Associated Press]
▶ Berry Global Group, Inc. Joins the Fortune 500   [Jun-13-17 05:30PM  Business Wire]
▶ Berry Global beats Street 2Q forecasts   [May-03-17 08:41AM  Associated Press]
▶ Berry Plastics Changes Name to Berry Global   [Apr-03-17 04:45PM  Business Wire]
▶ Taking a Look at Berry Plastics   [Mar-27-17 06:12PM  GuruFocus.com]
▶ Berry Plastics beats 1Q profit forecasts   [08:40AM  Associated Press]
▶ Top Mid-Cap Stocks for 2017: Berry Plastics, Crane Co.   [Dec-19-16 08:31AM  at TheStreet]
▶ Is Erie Indemnity Company (ERIE) a Good Stock to Buy?   [Dec-13-16 06:54AM  at Insider Monkey]
▶ This Hedge Fund Just Made A Massive Bet Against the SPY   [Nov-11-16 02:43PM  at Insider Monkey]
Stock chart of BERY Financial statements of BERY
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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