Intrinsic value of Bluerock Residential Growth REIT - BRG

Previous Close

$10.22

  Intrinsic Value

$4.70

stock screener

  Rating & Target

str. sell

-54%

Previous close

$10.22

 
Intrinsic value

$4.70

 
Up/down potential

-54%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as BRG.

We calculate the intrinsic value of BRG 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 0.2

 

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, %
  75.00
  50.00
  45.50
  41.45
  37.81
  34.52
  31.57
  28.91
  26.52
  24.37
  22.43
  20.69
  19.12
  17.71
  16.44
  15.29
  14.27
  13.34
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
Revenue, $m
  77
  116
  168
  238
  328
  441
  580
  747
  946
  1,176
  1,440
  1,738
  2,070
  2,437
  2,838
  3,272
  3,738
  4,237
  4,767
  5,327
  5,917
  6,537
  7,185
  7,863
  8,570
  9,306
  10,072
  10,868
  11,696
  12,556
  13,450
Variable operating expenses, $m
 
  119
  172
  244
  336
  452
  595
  767
  970
  1,207
  1,477
  1,783
  2,124
  2,500
  2,911
  3,357
  3,835
  4,347
  4,891
  5,465
  6,071
  6,707
  7,372
  8,067
  8,793
  9,548
  10,334
  11,151
  12,000
  12,883
  13,800
Fixed operating expenses, $m
 
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
Total operating expenses, $m
  80
  120
  173
  245
  337
  453
  596
  768
  971
  1,208
  1,478
  1,784
  2,125
  2,501
  2,912
  3,358
  3,836
  4,349
  4,893
  5,467
  6,073
  6,709
  7,374
  8,069
  8,795
  9,550
  10,336
  11,153
  12,002
  12,885
  13,802
Operating income, $m
  -3
  -4
  -5
  -7
  -10
  -13
  -16
  -21
  -26
  -32
  -39
  -46
  -55
  -65
  -75
  -87
  -99
  -112
  -125
  -140
  -155
  -172
  -189
  -206
  -225
  -244
  -264
  -285
  -306
  -329
  -352
EBITDA, $m
  29
  44
  64
  91
  126
  170
  224
  290
  367
  456
  559
  675
  804
  947
  1,103
  1,272
  1,453
  1,647
  1,853
  2,071
  2,301
  2,542
  2,794
  3,058
  3,333
  3,620
  3,918
  4,227
  4,549
  4,884
  5,232
Interest expense (income), $m
  18
  25
  39
  58
  83
  115
  156
  206
  266
  337
  420
  515
  622
  742
  874
  1,018
  1,174
  1,341
  1,521
  1,711
  1,913
  2,125
  2,348
  2,581
  2,825
  3,079
  3,343
  3,619
  3,905
  4,203
  4,512
Earnings before tax, $m
  -3
  -29
  -44
  -65
  -92
  -128
  -172
  -226
  -292
  -369
  -459
  -562
  -677
  -806
  -949
  -1,104
  -1,272
  -1,453
  -1,646
  -1,851
  -2,068
  -2,296
  -2,536
  -2,787
  -3,049
  -3,322
  -3,607
  -3,903
  -4,211
  -4,531
  -4,864
Tax expense, $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
  0
Net income, $m
  -4
  -29
  -44
  -65
  -92
  -128
  -172
  -226
  -292
  -369
  -459
  -562
  -677
  -806
  -949
  -1,104
  -1,272
  -1,453
  -1,646
  -1,851
  -2,068
  -2,296
  -2,536
  -2,787
  -3,049
  -3,322
  -3,607
  -3,903
  -4,211
  -4,531
  -4,864

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  82
  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
  1,241
  1,750
  2,546
  3,602
  4,963
  6,677
  8,785
  11,325
  14,329
  17,821
  21,819
  26,333
  31,368
  36,923
  42,993
  49,569
  56,640
  64,195
  72,222
  80,711
  89,653
  99,041
  108,869
  119,137
  129,846
  140,999
  152,604
  164,671
  177,213
  190,248
  203,792
Adjusted assets (=assets-cash), $m
  1,159
  1,750
  2,546
  3,602
  4,963
  6,677
  8,785
  11,325
  14,329
  17,821
  21,819
  26,333
  31,368
  36,923
  42,993
  49,569
  56,640
  64,195
  72,222
  80,711
  89,653
  99,041
  108,869
  119,137
  129,846
  140,999
  152,604
  164,671
  177,213
  190,248
  203,792
Revenue / Adjusted assets
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
Average production assets, $m
  764
  1,146
  1,667
  2,359
  3,250
  4,372
  5,753
  7,416
  9,383
  11,670
  14,288
  17,244
  20,542
  24,179
  28,154
  32,460
  37,091
  42,038
  47,295
  52,854
  58,710
  64,857
  71,293
  78,017
  85,030
  92,333
  99,933
  107,835
  116,049
  124,584
  133,454
Working capital, $m
  0
  -123
  -179
  -253
  -349
  -469
  -617
  -796
  -1,007
  -1,253
  -1,534
  -1,851
  -2,205
  -2,595
  -3,022
  -3,484
  -3,981
  -4,512
  -5,076
  -5,673
  -6,302
  -6,962
  -7,652
  -8,374
  -9,127
  -9,911
  -10,727
  -11,575
  -12,456
  -13,373
  -14,325
Total debt, $m
  711
  1,112
  1,651
  2,367
  3,290
  4,452
  5,881
  7,603
  9,640
  12,007
  14,718
  17,779
  21,193
  24,959
  29,074
  33,533
  38,327
  43,449
  48,892
  54,647
  60,710
  67,075
  73,738
  80,700
  87,960
  95,522
  103,390
  111,572
  120,076
  128,913
  138,096
Total liabilities, $m
  786
  1,187
  1,726
  2,442
  3,365
  4,527
  5,956
  7,678
  9,715
  12,082
  14,793
  17,854
  21,268
  25,034
  29,149
  33,608
  38,402
  43,524
  48,967
  54,722
  60,785
  67,150
  73,813
  80,775
  88,035
  95,597
  103,465
  111,647
  120,151
  128,988
  138,171
Total equity, $m
  455
  564
  820
  1,160
  1,598
  2,150
  2,829
  3,647
  4,614
  5,738
  7,026
  8,479
  10,101
  11,889
  13,844
  15,961
  18,238
  20,671
  23,256
  25,989
  28,868
  31,891
  35,056
  38,362
  41,810
  45,402
  49,138
  53,024
  57,063
  61,260
  65,621
Total liabilities and equity, $m
  1,241
  1,751
  2,546
  3,602
  4,963
  6,677
  8,785
  11,325
  14,329
  17,820
  21,819
  26,333
  31,369
  36,923
  42,993
  49,569
  56,640
  64,195
  72,223
  80,711
  89,653
  99,041
  108,869
  119,137
  129,845
  140,999
  152,603
  164,671
  177,214
  190,248
  203,792
Debt-to-equity ratio
  1.563
  1.970
  2.010
  2.040
  2.060
  2.070
  2.080
  2.090
  2.090
  2.090
  2.090
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
  2.100
Adjusted equity ratio
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -4
  -29
  -44
  -65
  -92
  -128
  -172
  -226
  -292
  -369
  -459
  -562
  -677
  -806
  -949
  -1,104
  -1,272
  -1,453
  -1,646
  -1,851
  -2,068
  -2,296
  -2,536
  -2,787
  -3,049
  -3,322
  -3,607
  -3,903
  -4,211
  -4,531
  -4,864
Depreciation, amort., depletion, $m
  32
  48
  70
  99
  136
  183
  241
  310
  393
  488
  598
  722
  859
  1,012
  1,178
  1,358
  1,552
  1,759
  1,979
  2,211
  2,456
  2,714
  2,983
  3,264
  3,558
  3,863
  4,181
  4,512
  4,856
  5,213
  5,584
Funds from operations, $m
  41
  19
  25
  34
  44
  55
  69
  84
  101
  119
  139
  160
  182
  205
  229
  254
  280
  306
  333
  360
  388
  417
  447
  477
  509
  541
  574
  609
  644
  682
  720
Change in working capital, $m
  7
  -41
  -56
  -74
  -96
  -120
  -148
  -179
  -211
  -245
  -281
  -317
  -354
  -390
  -427
  -462
  -497
  -531
  -564
  -597
  -629
  -660
  -691
  -722
  -753
  -784
  -816
  -848
  -882
  -916
  -952
Cash from operations, $m
  34
  60
  81
  108
  139
  176
  217
  262
  312
  365
  420
  477
  536
  596
  656
  716
  777
  837
  897
  957
  1,017
  1,077
  1,138
  1,199
  1,261
  1,325
  1,390
  1,457
  1,526
  1,598
  1,672
Maintenance CAPEX, $m
  0
  -32
  -48
  -70
  -99
  -136
  -183
  -241
  -310
  -393
  -488
  -598
  -722
  -859
  -1,012
  -1,178
  -1,358
  -1,552
  -1,759
  -1,979
  -2,211
  -2,456
  -2,714
  -2,983
  -3,264
  -3,558
  -3,863
  -4,181
  -4,512
  -4,856
  -5,213
New CAPEX, $m
  -6
  -382
  -521
  -691
  -892
  -1,122
  -1,380
  -1,663
  -1,967
  -2,287
  -2,618
  -2,956
  -3,297
  -3,638
  -3,975
  -4,306
  -4,630
  -4,947
  -5,257
  -5,559
  -5,856
  -6,147
  -6,436
  -6,724
  -7,012
  -7,304
  -7,600
  -7,902
  -8,214
  -8,535
  -8,870
Cash from investing activities, $m
  -513
  -414
  -569
  -761
  -991
  -1,258
  -1,563
  -1,904
  -2,277
  -2,680
  -3,106
  -3,554
  -4,019
  -4,497
  -4,987
  -5,484
  -5,988
  -6,499
  -7,016
  -7,538
  -8,067
  -8,603
  -9,150
  -9,707
  -10,276
  -10,862
  -11,463
  -12,083
  -12,726
  -13,391
  -14,083
Free cash flow, $m
  -479
  -354
  -488
  -653
  -851
  -1,082
  -1,347
  -1,642
  -1,966
  -2,315
  -2,686
  -3,077
  -3,483
  -3,902
  -4,331
  -4,768
  -5,212
  -5,662
  -6,119
  -6,581
  -7,050
  -7,527
  -8,012
  -8,508
  -9,015
  -9,537
  -10,073
  -10,627
  -11,199
  -11,793
  -12,410
Issuance/(repayment) of debt, $m
  297
  401
  540
  716
  923
  1,162
  1,429
  1,722
  2,037
  2,368
  2,711
  3,061
  3,414
  3,766
  4,115
  4,458
  4,794
  5,122
  5,443
  5,756
  6,063
  6,365
  6,664
  6,962
  7,260
  7,562
  7,868
  8,182
  8,504
  8,837
  9,183
Issuance/(repurchase) of shares, $m
  212
  219
  301
  405
  531
  680
  851
  1,044
  1,259
  1,494
  1,746
  2,015
  2,299
  2,595
  2,903
  3,221
  3,549
  3,886
  4,231
  4,585
  4,947
  5,319
  5,701
  6,093
  6,497
  6,914
  7,344
  7,789
  8,250
  8,728
  9,225
Cash from financing (excl. dividends), $m  
  526
  620
  841
  1,121
  1,454
  1,842
  2,280
  2,766
  3,296
  3,862
  4,457
  5,076
  5,713
  6,361
  7,018
  7,679
  8,343
  9,008
  9,674
  10,341
  11,010
  11,684
  12,365
  13,055
  13,757
  14,476
  15,212
  15,971
  16,754
  17,565
  18,408
Total cash flow (excl. dividends), $m
  47
  266
  353
  467
  603
  759
  934
  1,125
  1,330
  1,546
  1,770
  1,999
  2,230
  2,460
  2,688
  2,912
  3,131
  3,346
  3,555
  3,759
  3,960
  4,157
  4,352
  4,547
  4,742
  4,939
  5,139
  5,344
  5,554
  5,772
  5,998
Retained Cash Flow (-), $m
  -179
  -219
  -301
  -405
  -531
  -680
  -851
  -1,044
  -1,259
  -1,494
  -1,746
  -2,015
  -2,299
  -2,595
  -2,903
  -3,221
  -3,549
  -3,886
  -4,231
  -4,585
  -4,947
  -5,319
  -5,701
  -6,093
  -6,497
  -6,914
  -7,344
  -7,789
  -8,250
  -8,728
  -9,225
Prev. year cash balance distribution, $m
 
  82
  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
 
  129
  52
  62
  72
  79
  83
  80
  71
  53
  24
  -16
  -69
  -135
  -215
  -310
  -418
  -540
  -676
  -825
  -988
  -1,162
  -1,348
  -1,546
  -1,755
  -1,975
  -2,205
  -2,445
  -2,695
  -2,956
  -3,227
Discount rate, %
 
  9.80
  10.29
  10.80
  11.34
  11.91
  12.51
  13.13
  13.79
  14.48
  15.20
  15.96
  16.76
  17.60
  18.48
  19.40
  20.37
  21.39
  22.46
  23.58
  24.76
  26.00
  27.30
  28.67
  30.10
  31.61
  33.19
  34.85
  36.59
  38.42
  40.34
PV of cash for distribution, $m
 
  117
  43
  46
  47
  45
  41
  34
  25
  16
  6
  -3
  -11
  -16
  -20
  -22
  -22
  -20
  -18
  -15
  -12
  -9
  -7
  -5
  -3
  -2
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  54.3
  30.8
  18.1
  10.9
  6.8
  4.3
  2.8
  1.9
  1.3
  0.9
  0.6
  0.5
  0.3
  0.3
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Bluerock Residential Growth REIT, Inc. is a real estate investment trust. The Company is focused on acquiring a portfolio of residential real estate assets. As of December 31, 2016, the Company's portfolio consisted of interests in 31 properties (21 operating and 10 development properties). As of December 31, 2016, its properties contained an aggregate of 9,570 units, consisting of 6,972 operating units and 2,598 units under development. As of December 31, 2016, its operating properties included ARIUM at Palmer Ranch, Sarasota; ARIUM Grandewood, Orlando; ARIUM Gulfshore, Naples; ARIUM Palms, Orlando; ARIUM Pine Lakes, Port St. Lucie; ARIUM Westside, Atlanta; Ashton Reserve, Charlotte; Enders at Baldwin Park, Orlando; Fox Hill, Austin; Lansbrook Village, Palm Harbor; Legacy at Southpark, Austin; Nevadan, Atlanta; Roswell City Walk, Roswell; Sorrel, Frisco; Sovereign, Fort Worth; The Preserve at Henderson Beach, Destin; Village Green of Ann Arbor, Ann Arbor, and Whetstone, Durham.

FINANCIAL RATIOS  of  Bluerock Residential Growth REIT (BRG)

Valuation Ratios
P/E Ratio -50
Price to Sales 2.6
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 5.9
Price to Free Cash Flow 7.1
Growth Rates
Sales Growth Rate 75%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 156.3%
Total Debt to Equity 156.3%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 1.7%
Return On Total Capital -0.4%
Ret/ On T. Cap. - 3 Yr. Avg. -0.8%
Return On Equity -1.1%
Return On Equity - 3 Yr. Avg. -3.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 61%
Gross Margin - 3 Yr. Avg. 58.9%
EBITDA Margin 61%
EBITDA Margin - 3 Yr. Avg. 63.2%
Operating Margin -3.9%
Oper. Margin - 3 Yr. Avg. -7.3%
Pre-Tax Margin -3.9%
Pre-Tax Margin - 3 Yr. Avg. -3%
Net Profit Margin -5.2%
Net Profit Margin - 3 Yr. Avg. -5.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio -850%

BRG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BRG stock intrinsic value calculation we used $77 million for the last fiscal year's total revenue generated by Bluerock Residential Growth REIT. The default revenue input number comes from 2016 income statement of Bluerock Residential Growth REIT. 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 BRG stock valuation model: a) initial revenue growth rate of 50% 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 9.8%, whose default value for BRG is calculated based on our internal credit rating of Bluerock Residential Growth REIT, 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 Bluerock Residential Growth REIT.
    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 BRG stock the variable cost ratio is equal to 102.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1 million in the base year in the intrinsic value calculation for BRG 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 Bluerock Residential Growth REIT.

Corporate tax rate of 27% is the nominal tax rate for Bluerock Residential Growth REIT. 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 BRG 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 BRG are equal to 992.2%.

Life of production assets of 23.9 years is the average useful life of capital assets used in Bluerock Residential Growth REIT 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 BRG is equal to -106.5%. 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 - $455 million for Bluerock Residential Growth REIT - 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 24.193 million for Bluerock Residential Growth REIT 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 Bluerock Residential Growth REIT at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
BLK BlackRock 511.87 2,347.68  str.buy
AMH American Homes 22.25 3.75  str.sell
NXRT NexPoint Resid 26.62 2.76  str.sell
TCI Transcontinent 33.99 5.91  str.sell
AVB Avalonbay Comm 181.66 18.41  str.sell
UDR UDR 39.36 2.89  str.sell

COMPANY NEWS

▶ Bluerock reports 3Q results   [Nov-07-17 08:49AM  Associated Press]
▶ Bluerock reports 2Q results   [Aug-08-17 11:55PM  Associated Press]
▶ Bluerock reports 1Q results   [May-08-17 08:42AM  Associated Press]
▶ Bluerock reports 4Q results   [08:56AM  Associated Press]
Financial statements of BRG
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

VALUATION THEORY       ASSET ALLOCATION

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

Copyright © X-FIN.com 2005-2017. All rigths reserved.