Intrinsic value of Bunge - BG

Previous Close

$71.38

  Intrinsic Value

$395.59

stock screener

  Rating & Target

str. buy

+454%

  Value-price divergence*

+2379%

Previous close

$71.38

 
Intrinsic value

$395.59

 
Up/down potential

+454%

 
Rating

str. buy

 
Value-price divergence*

+2379%

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

We calculate the intrinsic value of BG 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 10.0

 

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, %
  -1.79
  10.50
  9.95
  9.45
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.36
  5.32
  5.29
  5.26
Revenue, $m
  42,679
  47,160
  51,853
  56,755
  61,869
  67,195
  72,737
  78,500
  84,490
  90,715
  97,183
  103,906
  110,895
  118,162
  125,722
  133,590
  141,782
  150,317
  159,211
  168,486
  178,162
  188,262
  198,808
  209,825
  221,339
  233,377
  245,967
  259,140
  272,925
  287,357
  302,470
Variable operating expenses, $m
 
  35,508
  39,037
  42,725
  46,570
  50,576
  54,745
  59,079
  63,584
  68,266
  73,131
  78,151
  83,407
  88,873
  94,559
  100,477
  106,638
  113,057
  119,747
  126,723
  134,000
  141,596
  149,528
  157,815
  166,475
  175,529
  184,998
  194,906
  205,274
  216,129
  227,495
Fixed operating expenses, $m
 
  9,989
  10,238
  10,494
  10,757
  11,026
  11,301
  11,584
  11,873
  12,170
  12,474
  12,786
  13,106
  13,434
  13,769
  14,114
  14,467
  14,828
  15,199
  15,579
  15,968
  16,368
  16,777
  17,196
  17,626
  18,067
  18,518
  18,981
  19,456
  19,942
  20,441
Total operating expenses, $m
  41,626
  45,497
  49,275
  53,219
  57,327
  61,602
  66,046
  70,663
  75,457
  80,436
  85,605
  90,937
  96,513
  102,307
  108,328
  114,591
  121,105
  127,885
  134,946
  142,302
  149,968
  157,964
  166,305
  175,011
  184,101
  193,596
  203,516
  213,887
  224,730
  236,071
  247,936
Operating income, $m
  1,053
  1,664
  2,577
  3,537
  4,542
  5,593
  6,691
  7,837
  9,032
  10,278
  11,577
  12,969
  14,382
  15,856
  17,394
  19,000
  20,678
  22,431
  24,265
  26,184
  28,193
  30,298
  32,503
  34,814
  37,238
  39,781
  42,451
  45,253
  48,195
  51,286
  54,534
EBITDA, $m
  1,600
  2,264
  3,234
  4,252
  5,318
  6,433
  7,597
  8,812
  10,078
  11,399
  12,775
  14,210
  15,706
  17,267
  18,895
  20,595
  22,371
  24,226
  26,167
  28,196
  30,321
  32,546
  34,877
  37,320
  39,881
  42,568
  45,388
  48,347
  51,454
  54,718
  58,146
Interest expense (income), $m
  234
  169
  224
  282
  342
  405
  471
  539
  609
  683
  760
  839
  922
  1,008
  1,097
  1,190
  1,287
  1,387
  1,492
  1,602
  1,716
  1,834
  1,959
  2,088
  2,224
  2,365
  2,513
  2,668
  2,830
  2,999
  3,177
Earnings before tax, $m
  996
  1,495
  2,353
  3,255
  4,199
  5,188
  6,221
  7,298
  8,423
  9,595
  10,818
  12,130
  13,460
  14,848
  16,297
  17,810
  19,391
  21,044
  22,773
  24,583
  26,478
  28,463
  30,544
  32,726
  35,015
  37,416
  39,937
  42,585
  45,366
  48,287
  51,357
Tax expense, $m
  220
  404
  635
  879
  1,134
  1,401
  1,680
  1,971
  2,274
  2,591
  2,921
  3,275
  3,634
  4,009
  4,400
  4,809
  5,236
  5,682
  6,149
  6,637
  7,149
  7,685
  8,247
  8,836
  9,454
  10,102
  10,783
  11,498
  12,249
  13,037
  13,866
Net income, $m
  745
  1,091
  1,718
  2,376
  3,066
  3,787
  4,541
  5,328
  6,149
  7,004
  7,897
  8,855
  9,826
  10,839
  11,897
  13,001
  14,155
  15,362
  16,624
  17,946
  19,329
  20,778
  22,297
  23,890
  25,561
  27,314
  29,154
  31,087
  33,117
  35,249
  37,491

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,343
  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
  19,188
  19,716
  21,678
  23,727
  25,865
  28,091
  30,408
  32,818
  35,322
  37,924
  40,628
  43,439
  46,361
  49,399
  52,559
  55,849
  59,274
  62,841
  66,560
  70,437
  74,483
  78,705
  83,114
  87,719
  92,533
  97,566
  102,829
  108,336
  114,099
  120,133
  126,450
Adjusted assets (=assets-cash), $m
  17,845
  19,716
  21,678
  23,727
  25,865
  28,091
  30,408
  32,818
  35,322
  37,924
  40,628
  43,439
  46,361
  49,399
  52,559
  55,849
  59,274
  62,841
  66,560
  70,437
  74,483
  78,705
  83,114
  87,719
  92,533
  97,566
  102,829
  108,336
  114,099
  120,133
  126,450
Revenue / Adjusted assets
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
  2.392
Average production assets, $m
  5,249
  5,801
  6,378
  6,981
  7,610
  8,265
  8,947
  9,655
  10,392
  11,158
  11,954
  12,780
  13,640
  14,534
  15,464
  16,432
  17,439
  18,489
  19,583
  20,724
  21,914
  23,156
  24,453
  25,808
  27,225
  28,705
  30,254
  31,874
  33,570
  35,345
  37,204
Working capital, $m
  3,408
  4,197
  4,615
  5,051
  5,506
  5,980
  6,474
  6,986
  7,520
  8,074
  8,649
  9,248
  9,870
  10,516
  11,189
  11,890
  12,619
  13,378
  14,170
  14,995
  15,856
  16,755
  17,694
  18,674
  19,699
  20,771
  21,891
  23,063
  24,290
  25,575
  26,920
Total debt, $m
  4,792
  4,578
  5,755
  6,984
  8,267
  9,603
  10,993
  12,439
  13,941
  15,502
  17,125
  18,811
  20,564
  22,387
  24,284
  26,257
  28,312
  30,453
  32,684
  35,010
  37,438
  39,971
  42,616
  45,380
  48,268
  51,287
  54,445
  57,750
  61,208
  64,828
  68,618
Total liabilities, $m
  12,044
  11,830
  13,007
  14,236
  15,519
  16,855
  18,245
  19,691
  21,193
  22,754
  24,377
  26,063
  27,816
  29,639
  31,536
  33,509
  35,564
  37,705
  39,936
  42,262
  44,690
  47,223
  49,868
  52,632
  55,520
  58,539
  61,697
  65,002
  68,460
  72,080
  75,870
Total equity, $m
  7,144
  7,886
  8,671
  9,491
  10,346
  11,237
  12,163
  13,127
  14,129
  15,170
  16,251
  17,376
  18,544
  19,760
  21,024
  22,339
  23,709
  25,137
  26,624
  28,175
  29,793
  31,482
  33,245
  35,088
  37,013
  39,026
  41,132
  43,334
  45,640
  48,053
  50,580
Total liabilities and equity, $m
  19,188
  19,716
  21,678
  23,727
  25,865
  28,092
  30,408
  32,818
  35,322
  37,924
  40,628
  43,439
  46,360
  49,399
  52,560
  55,848
  59,273
  62,842
  66,560
  70,437
  74,483
  78,705
  83,113
  87,720
  92,533
  97,565
  102,829
  108,336
  114,100
  120,133
  126,450
Debt-to-equity ratio
  0.671
  0.580
  0.660
  0.740
  0.800
  0.850
  0.900
  0.950
  0.990
  1.020
  1.050
  1.080
  1.110
  1.130
  1.160
  1.180
  1.190
  1.210
  1.230
  1.240
  1.260
  1.270
  1.280
  1.290
  1.300
  1.310
  1.320
  1.330
  1.340
  1.350
  1.360
Adjusted equity ratio
  0.369
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  745
  1,091
  1,718
  2,376
  3,066
  3,787
  4,541
  5,328
  6,149
  7,004
  7,897
  8,855
  9,826
  10,839
  11,897
  13,001
  14,155
  15,362
  16,624
  17,946
  19,329
  20,778
  22,297
  23,890
  25,561
  27,314
  29,154
  31,087
  33,117
  35,249
  37,491
Depreciation, amort., depletion, $m
  547
  600
  657
  715
  776
  840
  906
  975
  1,046
  1,121
  1,198
  1,241
  1,324
  1,411
  1,501
  1,595
  1,693
  1,795
  1,901
  2,012
  2,128
  2,248
  2,374
  2,506
  2,643
  2,787
  2,937
  3,095
  3,259
  3,432
  3,612
Funds from operations, $m
  2,251
  1,692
  2,374
  3,091
  3,842
  4,627
  5,447
  6,303
  7,195
  8,125
  9,095
  10,096
  11,150
  12,250
  13,398
  14,597
  15,849
  17,157
  18,526
  19,958
  21,456
  23,026
  24,671
  26,396
  28,204
  30,101
  32,092
  34,182
  36,376
  38,681
  41,103
Change in working capital, $m
  347
  399
  418
  436
  455
  474
  493
  513
  533
  554
  576
  598
  622
  647
  673
  700
  729
  760
  792
  825
  861
  899
  939
  981
  1,025
  1,071
  1,121
  1,172
  1,227
  1,284
  1,345
Cash from operations, $m
  1,904
  1,293
  1,957
  2,655
  3,387
  4,153
  4,954
  5,790
  6,662
  7,571
  8,519
  9,498
  10,528
  11,603
  12,725
  13,896
  15,120
  16,398
  17,734
  19,132
  20,595
  22,127
  23,733
  25,415
  27,179
  29,029
  30,971
  33,009
  35,149
  37,397
  39,758
Maintenance CAPEX, $m
  0
  -510
  -563
  -619
  -678
  -739
  -802
  -869
  -937
  -1,009
  -1,083
  -1,161
  -1,241
  -1,324
  -1,411
  -1,501
  -1,595
  -1,693
  -1,795
  -1,901
  -2,012
  -2,128
  -2,248
  -2,374
  -2,506
  -2,643
  -2,787
  -2,937
  -3,095
  -3,259
  -3,432
New CAPEX, $m
  -784
  -552
  -577
  -603
  -629
  -655
  -682
  -709
  -737
  -766
  -796
  -827
  -860
  -894
  -930
  -968
  -1,008
  -1,050
  -1,094
  -1,141
  -1,190
  -1,242
  -1,297
  -1,355
  -1,416
  -1,481
  -1,549
  -1,620
  -1,696
  -1,775
  -1,859
Cash from investing activities, $m
  -926
  -1,062
  -1,140
  -1,222
  -1,307
  -1,394
  -1,484
  -1,578
  -1,674
  -1,775
  -1,879
  -1,988
  -2,101
  -2,218
  -2,341
  -2,469
  -2,603
  -2,743
  -2,889
  -3,042
  -3,202
  -3,370
  -3,545
  -3,729
  -3,922
  -4,124
  -4,336
  -4,557
  -4,791
  -5,034
  -5,291
Free cash flow, $m
  978
  231
  816
  1,432
  2,080
  2,759
  3,470
  4,212
  4,988
  5,796
  6,640
  7,510
  8,428
  9,385
  10,384
  11,427
  12,517
  13,655
  14,845
  16,090
  17,393
  18,758
  20,187
  21,686
  23,257
  24,906
  26,636
  28,452
  30,359
  32,362
  34,467
Issuance/(repayment) of debt, $m
  61
  1,129
  1,177
  1,230
  1,283
  1,336
  1,390
  1,446
  1,503
  1,561
  1,623
  1,686
  1,753
  1,823
  1,896
  1,974
  2,055
  2,141
  2,231
  2,326
  2,427
  2,533
  2,645
  2,764
  2,888
  3,020
  3,158
  3,304
  3,458
  3,620
  3,791
Issuance/(repurchase) of shares, $m
  -200
  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 from financing (excl. dividends), $m  
  -231
  1,129
  1,177
  1,230
  1,283
  1,336
  1,390
  1,446
  1,503
  1,561
  1,623
  1,686
  1,753
  1,823
  1,896
  1,974
  2,055
  2,141
  2,231
  2,326
  2,427
  2,533
  2,645
  2,764
  2,888
  3,020
  3,158
  3,304
  3,458
  3,620
  3,791
Total cash flow (excl. dividends), $m
  780
  1,360
  1,993
  2,662
  3,363
  4,095
  4,860
  5,658
  6,490
  7,358
  8,263
  9,196
  10,181
  11,208
  12,281
  13,401
  14,571
  15,796
  17,076
  18,417
  19,820
  21,291
  22,833
  24,449
  26,145
  27,925
  29,794
  31,756
  33,817
  35,982
  38,258
Retained Cash Flow (-), $m
  -703
  -742
  -785
  -820
  -855
  -891
  -927
  -964
  -1,002
  -1,041
  -1,082
  -1,124
  -1,169
  -1,215
  -1,264
  -1,316
  -1,370
  -1,427
  -1,487
  -1,551
  -1,618
  -1,689
  -1,764
  -1,842
  -1,925
  -2,013
  -2,105
  -2,203
  -2,305
  -2,413
  -2,527
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
 
  617
  1,209
  1,842
  2,507
  3,204
  3,933
  4,694
  5,488
  6,317
  7,181
  8,072
  9,012
  9,993
  11,016
  12,085
  13,202
  14,368
  15,589
  16,866
  18,202
  19,602
  21,069
  22,607
  24,220
  25,912
  27,688
  29,553
  31,512
  33,569
  35,731
Discount rate, %
 
  5.10
  5.36
  5.62
  5.90
  6.20
  6.51
  6.83
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.27
  12.89
  13.53
  14.21
  14.92
  15.66
  16.45
  17.27
  18.13
  19.04
  19.99
  20.99
PV of cash for distribution, $m
 
  587
  1,089
  1,563
  1,993
  2,372
  2,694
  2,955
  3,152
  3,285
  3,354
  3,355
  3,304
  3,198
  3,046
  2,855
  2,633
  2,388
  2,131
  1,869
  1,611
  1,364
  1,133
  923
  737
  576
  440
  328
  239
  170
  118
Current shareholders' claim on cash, %
  100
  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
  100.0

Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company's operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.

FINANCIAL RATIOS  of  Bunge (BG)

Valuation Ratios
P/E Ratio 13.4
Price to Sales 0.2
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 5.2
Price to Free Cash Flow 8.9
Growth Rates
Sales Growth Rate -1.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 20.8%
Cap. Spend. - 3 Yr. Gr. Rate -5.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 43%
Total Debt to Equity 67.1%
Interest Coverage 5
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 4.2%
Return On Total Capital 6.4%
Ret/ On T. Cap. - 3 Yr. Avg. 5.3%
Return On Equity 11%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 2.3
Profitability Ratios
Gross Margin 5.6%
Gross Margin - 3 Yr. Avg. 5.5%
EBITDA Margin 4.2%
EBITDA Margin - 3 Yr. Avg. 3.7%
Operating Margin 2.5%
Oper. Margin - 3 Yr. Avg. 2.3%
Pre-Tax Margin 2.3%
Pre-Tax Margin - 3 Yr. Avg. 2%
Net Profit Margin 1.7%
Net Profit Margin - 3 Yr. Avg. 1.5%
Effective Tax Rate 22.1%
Eff/ Tax Rate - 3 Yr. Avg. 28.1%
Payout Ratio 34.5%

BG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BG stock intrinsic value calculation we used $42679 million for the last fiscal year's total revenue generated by Bunge. The default revenue input number comes from 2016 income statement of Bunge. 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 BG stock valuation model: a) initial revenue growth rate of 10.5% 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 5.1%, whose default value for BG is calculated based on our internal credit rating of Bunge, 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 Bunge.
    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 BG stock the variable cost ratio is equal to 75.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $9745 million in the base year in the intrinsic value calculation for BG 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 4.9% for Bunge.

Corporate tax rate of 27% is the nominal tax rate for Bunge. 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 BG 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 BG are equal to 12.3%.

Life of production assets of 10.3 years is the average useful life of capital assets used in Bunge 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 BG is equal to 8.9%. 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 - $7144 million for Bunge - 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 140.739 million for Bunge 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 Bunge at the current share price and the inputted number of shares is $10.0 billion.

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COMPANY NEWS

▶ Bunge Ltd. Value Analysis (NYSE:BG) : August 24, 2017   [Aug-24-17 04:45PM  Capital Cube]
▶ Bunge beats 2Q profit forecasts   [Aug-02-17 10:55PM  Associated Press]
▶ Bunge's petition to claim soybean oil is heart healthy gets approval   [04:20PM  American City Business Journals]
▶ [$$] Bunge holds door open on sale of company   [02:27PM  Financial Times]
▶ Bunge Reports Second Quarter 2017 Results   [06:00AM  PR Newswire]
▶ Bunge Ltd. Value Analysis (NYSE:BG) : July 5, 2017   [Jul-05-17 01:21PM  Capital Cube]
▶ Huge grain supplies dampen impact of USDA reports   [Jun-08-17 07:00AM  Reuters]
▶ Huge grain supplies dampen impact of USDA reports   [Jun-07-17 04:32PM  Reuters]
▶ 3 No-Brainer Stocks to Buy in Agriculture   [09:28AM  Motley Fool]
▶ Glencore CEO Says Bunge Isn't Only Opportunity Out There   [Jun-01-17 09:00AM  Bloomberg Video]
▶ Bunge Announces Annual Meeting Results   [May-25-17 01:20PM  PR Newswire]
▶ Bunge To Glencore: What M&A Engagement?   [11:01AM  Barrons.com]
▶ Company News for May 24, 2017   [10:10AM  Zacks]
▶ [$$] Glencore Makes Takeover Approach to Bunge   [12:26AM  The Wall Street Journal]
▶ [$$] Glencore Makes Takeover Approach to Bunge   [May-23-17 10:17PM  The Wall Street Journal]
▶ Bunge Issues Statement   [08:13PM  PR Newswire]
▶ Sowing Glencore's Waves of Grain   [05:47PM  Bloomberg]
▶ What Happened in the Stock Market Today   [04:51PM  Motley Fool]
Financial statements of BG
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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