Intrinsic value of Barnwell Industries - BRN

Previous Close

$1.75

  Intrinsic Value

$88.86

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+5000%

Previous close

$1.75

 
Intrinsic value

$88.86

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+5000%

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

We calculate the intrinsic value of BRN 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 0.0

 

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, %
  -27.78
  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
  13
  20
  28
  40
  55
  74
  98
  126
  160
  199
  243
  293
  350
  411
  479
  552
  631
  715
  805
  899
  999
  1,104
  1,213
  1,328
  1,447
  1,571
  1,700
  1,835
  1,975
  2,120
  2,271
Variable operating expenses, $m
 
  8
  11
  15
  21
  29
  38
  49
  61
  76
  94
  113
  135
  158
  184
  213
  243
  275
  310
  346
  385
  425
  467
  511
  557
  605
  655
  706
  760
  816
  874
Fixed operating expenses, $m
 
  15
  16
  16
  17
  17
  17
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  25
  25
  26
  26
  27
  28
  29
  29
  30
  31
  31
Total operating expenses, $m
  20
  23
  27
  31
  38
  46
  55
  67
  79
  95
  113
  133
  155
  179
  205
  235
  265
  298
  333
  370
  410
  450
  493
  537
  584
  633
  684
  735
  790
  847
  905
Operating income, $m
  -7
  -3
  2
  9
  17
  29
  43
  60
  80
  103
  130
  161
  195
  232
  273
  318
  366
  417
  472
  529
  590
  654
  720
  790
  863
  938
  1,017
  1,099
  1,184
  1,273
  1,365
EBITDA, $m
  -5
  -3
  2
  9
  17
  29
  43
  60
  80
  103
  130
  161
  195
  232
  273
  318
  366
  417
  472
  529
  590
  654
  720
  790
  863
  938
  1,017
  1,099
  1,184
  1,273
  1,365
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  3
  4
  5
  7
  8
  11
  13
  15
  18
  21
  25
  28
  32
  36
  41
  45
  50
  55
  60
  66
  72
  78
  84
  90
  97
Earnings before tax, $m
  -4
  -3
  1
  8
  16
  27
  40
  56
  75
  97
  122
  150
  182
  217
  255
  297
  341
  389
  439
  493
  549
  608
  670
  735
  802
  872
  946
  1,022
  1,101
  1,183
  1,268
Tax expense, $m
  -1
  0
  0
  2
  4
  7
  11
  15
  20
  26
  33
  41
  49
  59
  69
  80
  92
  105
  119
  133
  148
  164
  181
  198
  217
  236
  255
  276
  297
  319
  342
Net income, $m
  -4
  -3
  1
  6
  12
  20
  29
  41
  55
  71
  89
  110
  133
  158
  186
  216
  249
  284
  321
  360
  401
  444
  489
  536
  586
  637
  690
  746
  803
  863
  926

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  16
  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
  32
  29
  41
  59
  81
  109
  143
  184
  233
  290
  355
  429
  511
  602
  700
  808
  923
  1,046
  1,177
  1,315
  1,461
  1,613
  1,774
  1,941
  2,115
  2,297
  2,486
  2,683
  2,887
  3,099
  3,320
Adjusted assets (=assets-cash), $m
  16
  29
  41
  59
  81
  109
  143
  184
  233
  290
  355
  429
  511
  602
  700
  808
  923
  1,046
  1,177
  1,315
  1,461
  1,613
  1,774
  1,941
  2,115
  2,297
  2,486
  2,683
  2,887
  3,099
  3,320
Revenue / Adjusted assets
  0.813
  0.690
  0.683
  0.678
  0.679
  0.679
  0.685
  0.685
  0.687
  0.686
  0.685
  0.683
  0.685
  0.683
  0.684
  0.683
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
  0.684
Average production assets, $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
Working capital, $m
  16
  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 debt, $m
  0
  7
  18
  34
  54
  79
  110
  147
  191
  242
  301
  367
  441
  522
  611
  708
  811
  922
  1,040
  1,164
  1,295
  1,433
  1,577
  1,728
  1,885
  2,048
  2,218
  2,395
  2,579
  2,770
  2,969
Total liabilities, $m
  18
  26
  37
  53
  73
  98
  129
  166
  210
  261
  320
  386
  460
  541
  630
  727
  830
  941
  1,059
  1,183
  1,314
  1,452
  1,596
  1,747
  1,904
  2,067
  2,237
  2,414
  2,598
  2,789
  2,988
Total equity, $m
  13
  3
  4
  6
  8
  11
  14
  18
  23
  29
  36
  43
  51
  60
  70
  81
  92
  105
  118
  131
  146
  161
  177
  194
  212
  230
  249
  268
  289
  310
  332
Total liabilities and equity, $m
  31
  29
  41
  59
  81
  109
  143
  184
  233
  290
  356
  429
  511
  601
  700
  808
  922
  1,046
  1,177
  1,314
  1,460
  1,613
  1,773
  1,941
  2,116
  2,297
  2,486
  2,682
  2,887
  3,099
  3,320
Debt-to-equity ratio
  0.000
  2.340
  4.420
  5.760
  6.650
  7.250
  7.670
  7.970
  8.190
  8.350
  8.470
  8.560
  8.630
  8.680
  8.730
  8.760
  8.790
  8.820
  8.840
  8.860
  8.870
  8.880
  8.890
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
  8.940
  8.940
Adjusted equity ratio
  -0.188
  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
  -4
  -3
  1
  6
  12
  20
  29
  41
  55
  71
  89
  110
  133
  158
  186
  216
  249
  284
  321
  360
  401
  444
  489
  536
  586
  637
  690
  746
  803
  863
  926
Depreciation, amort., depletion, $m
  2
  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
Funds from operations, $m
  6
  -3
  1
  6
  12
  20
  29
  41
  55
  71
  89
  110
  133
  158
  186
  216
  249
  284
  321
  360
  401
  444
  489
  536
  586
  637
  690
  746
  803
  863
  926
Change in working capital, $m
  4
  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 operations, $m
  2
  -3
  1
  6
  12
  20
  29
  41
  55
  71
  89
  110
  133
  158
  186
  216
  249
  284
  321
  360
  401
  444
  489
  536
  586
  637
  690
  746
  803
  863
  926
Maintenance CAPEX, $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
New CAPEX, $m
  -2
  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 investing activities, $m
  9
  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
Free cash flow, $m
  11
  -3
  1
  6
  12
  20
  29
  41
  55
  71
  89
  110
  133
  158
  186
  216
  249
  284
  321
  360
  401
  444
  489
  536
  586
  637
  690
  746
  803
  863
  926
Issuance/(repayment) of debt, $m
  -3
  7
  12
  15
  20
  25
  31
  37
  44
  51
  59
  66
  74
  81
  89
  96
  104
  111
  118
  124
  131
  138
  144
  151
  157
  164
  170
  177
  184
  191
  199
Issuance/(repurchase) of shares, $m
  0
  6
  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  
  -4
  13
  12
  15
  20
  25
  31
  37
  44
  51
  59
  66
  74
  81
  89
  96
  104
  111
  118
  124
  131
  138
  144
  151
  157
  164
  170
  177
  184
  191
  199
Total cash flow (excl. dividends), $m
  7
  10
  13
  21
  32
  45
  60
  78
  99
  122
  148
  176
  207
  240
  275
  313
  353
  395
  438
  484
  532
  582
  633
  687
  743
  800
  860
  923
  987
  1,055
  1,124
Retained Cash Flow (-), $m
  6
  -6
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
Prev. year cash balance distribution, $m
 
  13
  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
 
  16
  12
  20
  30
  42
  57
  74
  94
  116
  141
  169
  198
  231
  265
  302
  341
  382
  425
  470
  517
  566
  617
  670
  725
  782
  842
  903
  967
  1,033
  1,102
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
 
  16
  11
  17
  24
  33
  41
  50
  59
  67
  74
  80
  85
  88
  89
  89
  87
  83
  78
  72
  66
  59
  51
  44
  37
  30
  25
  19
  15
  11
  8
Current shareholders' claim on cash, %
  100
  50.0
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5
  46.5

Barnwell Industries, Inc., through its subsidiaries, acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through four segments: Oil and Natural Gas, Land Investment, Contract Drilling, and Residential Real Estate. It holds working interests in oil and natural gas properties located in the Progress area of Alberta, Canada; and investments in non-producing holdings in the provinces of Saskatchewan and British Columbia. The company also invests in land interests in Hawaii. In addition, it owns and operates four water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; drills water and water monitoring wells of various depths; installs and repairs water pumping systems; and distributes Floway pumps and equipment in Hawaii. Further, the company develops luxury residences for sale in Hawaii. Barnwell Industries, Inc. was founded in 1956 and is headquartered in Honolulu, Hawaii.


Warning: Division by zero in /home3/webhub/public_html/x-fin.com/stocks/a-inc/ratios.php on line 9

FINANCIAL RATIOS  of  Barnwell Industries (BRN)

Valuation Ratios
P/E Ratio -3.6
Price to Sales 1.1
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 7.2
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -27.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33.3%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.8
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -10.8%
Ret/ On Assets - 3 Yr. Avg. -2.4%
Return On Total Capital -22.9%
Ret/ On T. Cap. - 3 Yr. Avg. -5.4%
Return On Equity -25%
Return On Equity - 3 Yr. Avg. -5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 23.1%
Gross Margin - 3 Yr. Avg. 37.3%
EBITDA Margin -15.4%
EBITDA Margin - 3 Yr. Avg. 15.5%
Operating Margin -53.8%
Oper. Margin - 3 Yr. Avg. -25.4%
Pre-Tax Margin -30.8%
Pre-Tax Margin - 3 Yr. Avg. -2.3%
Net Profit Margin -30.8%
Net Profit Margin - 3 Yr. Avg. -7.2%
Effective Tax Rate 25%
Eff/ Tax Rate - 3 Yr. Avg. 36.1%
Payout Ratio 0%

BRN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BRN stock intrinsic value calculation we used $13 million for the last fiscal year's total revenue generated by Barnwell Industries. The default revenue input number comes from 2016 income statement of Barnwell Industries. 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 BRN 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 4.3%, whose default value for BRN is calculated based on our internal credit rating of Barnwell Industries, 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 Barnwell Industries.
    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 BRN stock the variable cost ratio is equal to 38.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $15 million in the base year in the intrinsic value calculation for BRN 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 Barnwell Industries.

Corporate tax rate of 27% is the nominal tax rate for Barnwell Industries. 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 BRN 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 BRN are equal to 0%.

Life of production assets of 10 years is the average useful life of capital assets used in Barnwell Industries 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 BRN is equal to 0%. 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 - $13 million for Barnwell Industries - 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 7.975 million for Barnwell Industries 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 Barnwell Industries at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
DNR Denbury Resour 1.36 0.29  str.sell
CRZO Carrizo Oil&Ga 15.54 0.09  str.sell

COMPANY NEWS

▶ Honolulu-based Barnwell Industries reports net earnings of $1.6M   [Feb-09-17 05:25PM  at bizjournals.com]
▶ Honolulu-based Barnwell Industries reports net earnings of $1.6M   [05:25PM  American City Business Journals]
▶ Barnwell Industries, Inc. Reports Receipt of Distributions   [Jan-05-17 08:30PM  GlobeNewswire]
▶ Buffalo planners approve new Residence Inn on Delaware Avenue   [Nov-22-16 08:20AM  at bizjournals.com]
▶ A Brown Co., Inc. : Neutral assessment   [May-05-16 04:02PM  Capital Cube]
▶ 10-Q for Barnwell Industries, Inc.   [Aug-14  08:10PM  at Company Spotlight]
▶ 10-Q for Barnwell Industries, Inc.   [May-15  08:09PM  at Company Spotlight]
▶ 10-Q for Barnwell Industries, Inc.   [Feb-15  07:07PM  at Company Spotlight]
▶ 10-K for Barnwell Industries, Inc.   [Dec-20  07:07PM  Company Spotlight]
▶ Pitney Bowes Executive VP Buys 10K Shares and 4 Insider Trades to Note   [May-20  11:52AM  at Wall St. Cheat Sheet]
Stock chart of BRN Financial statements of BRN Annual reports of BRN
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.