Intrinsic value of Cedar Realty Trust - CDR

Previous Close

$5.20

  Intrinsic Value

$1.69

stock screener

  Rating & Target

str. sell

-67%

  Value-price divergence*

+28%

Previous close

$5.20

 
Intrinsic value

$1.69

 
Up/down potential

-67%

 
Rating

str. sell

 
Value-price divergence*

+28%

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

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

We calculate the intrinsic value of CDR 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 0.4

 

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, %
  1.34
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  151
  154
  158
  162
  166
  171
  177
  183
  189
  196
  204
  212
  220
  230
  239
  250
  261
  272
  284
  297
  311
  325
  341
  357
  374
  391
  410
  430
  451
  472
  495
Variable operating expenses, $m
 
  102
  104
  107
  110
  113
  117
  121
  125
  130
  135
  140
  146
  152
  158
  165
  173
  180
  188
  197
  206
  215
  226
  236
  247
  259
  271
  285
  298
  313
  328
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
  116
  102
  104
  107
  110
  113
  117
  121
  125
  130
  135
  140
  146
  152
  158
  165
  173
  180
  188
  197
  206
  215
  226
  236
  247
  259
  271
  285
  298
  313
  328
Operating income, $m
  35
  52
  53
  55
  56
  58
  60
  62
  64
  66
  69
  72
  75
  78
  81
  84
  88
  92
  96
  101
  105
  110
  115
  121
  126
  132
  139
  145
  152
  160
  167
EBITDA, $m
  76
  94
  96
  98
  101
  104
  108
  111
  115
  120
  124
  129
  134
  140
  146
  152
  159
  166
  173
  181
  189
  198
  208
  217
  228
  238
  250
  262
  274
  288
  302
Interest expense (income), $m
  26
  25
  25
  26
  27
  28
  28
  29
  30
  32
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  51
  53
  56
  58
  61
  64
  67
  71
  74
  78
  82
Earnings before tax, $m
  9
  27
  28
  29
  29
  30
  31
  32
  34
  35
  36
  37
  39
  41
  42
  44
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  75
  78
  82
  86
Tax expense, $m
  0
  7
  8
  8
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
Net income, $m
  9
  20
  20
  21
  22
  22
  23
  24
  24
  25
  26
  27
  28
  30
  31
  32
  33
  35
  36
  38
  40
  42
  43
  45
  48
  50
  52
  55
  57
  60
  63

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3
  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
  1,234
  1,252
  1,281
  1,314
  1,351
  1,392
  1,437
  1,486
  1,539
  1,596
  1,657
  1,722
  1,792
  1,867
  1,946
  2,030
  2,119
  2,213
  2,313
  2,418
  2,529
  2,646
  2,770
  2,900
  3,037
  3,182
  3,334
  3,494
  3,663
  3,840
  4,027
Adjusted assets (=assets-cash), $m
  1,231
  1,252
  1,281
  1,314
  1,351
  1,392
  1,437
  1,486
  1,539
  1,596
  1,657
  1,722
  1,792
  1,867
  1,946
  2,030
  2,119
  2,213
  2,313
  2,418
  2,529
  2,646
  2,770
  2,900
  3,037
  3,182
  3,334
  3,494
  3,663
  3,840
  4,027
Revenue / Adjusted assets
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
Average production assets, $m
  1,224
  1,248
  1,277
  1,310
  1,347
  1,388
  1,433
  1,481
  1,534
  1,591
  1,652
  1,717
  1,787
  1,861
  1,940
  2,024
  2,113
  2,206
  2,306
  2,411
  2,521
  2,638
  2,762
  2,891
  3,028
  3,172
  3,324
  3,484
  3,652
  3,829
  4,015
Working capital, $m
  0
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
Total debt, $m
  608
  619
  634
  651
  671
  693
  716
  742
  770
  801
  833
  868
  905
  944
  986
  1,031
  1,078
  1,128
  1,181
  1,236
  1,295
  1,357
  1,423
  1,492
  1,565
  1,641
  1,722
  1,807
  1,896
  1,990
  2,089
Total liabilities, $m
  653
  664
  679
  696
  716
  738
  761
  787
  815
  846
  878
  913
  950
  989
  1,031
  1,076
  1,123
  1,173
  1,226
  1,281
  1,340
  1,402
  1,468
  1,537
  1,610
  1,686
  1,767
  1,852
  1,941
  2,035
  2,134
Total equity, $m
  581
  589
  602
  618
  635
  654
  675
  698
  723
  750
  779
  810
  842
  877
  915
  954
  996
  1,040
  1,087
  1,136
  1,189
  1,244
  1,302
  1,363
  1,428
  1,495
  1,567
  1,642
  1,722
  1,805
  1,893
Total liabilities and equity, $m
  1,234
  1,253
  1,281
  1,314
  1,351
  1,392
  1,436
  1,485
  1,538
  1,596
  1,657
  1,723
  1,792
  1,866
  1,946
  2,030
  2,119
  2,213
  2,313
  2,417
  2,529
  2,646
  2,770
  2,900
  3,038
  3,181
  3,334
  3,494
  3,663
  3,840
  4,027
Debt-to-equity ratio
  1.046
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
Adjusted equity ratio
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9
  20
  20
  21
  22
  22
  23
  24
  24
  25
  26
  27
  28
  30
  31
  32
  33
  35
  36
  38
  40
  42
  43
  45
  48
  50
  52
  55
  57
  60
  63
Depreciation, amort., depletion, $m
  41
  42
  43
  44
  45
  46
  48
  50
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  117
  122
  128
  134
Funds from operations, $m
  57
  62
  63
  65
  67
  69
  71
  73
  76
  79
  82
  85
  88
  92
  96
  100
  104
  109
  114
  119
  124
  130
  136
  142
  149
  156
  163
  171
  179
  188
  197
Change in working capital, $m
  -1
  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
  58
  62
  63
  65
  67
  69
  71
  73
  76
  79
  82
  85
  88
  92
  96
  100
  104
  109
  114
  119
  124
  130
  136
  142
  149
  156
  164
  171
  180
  188
  197
Maintenance CAPEX, $m
  0
  -41
  -42
  -43
  -44
  -45
  -46
  -48
  -50
  -51
  -53
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -97
  -101
  -106
  -111
  -117
  -122
  -128
New CAPEX, $m
  -32
  -24
  -29
  -33
  -37
  -41
  -45
  -49
  -53
  -57
  -61
  -65
  -70
  -74
  -79
  -84
  -89
  -94
  -99
  -105
  -111
  -117
  -123
  -130
  -137
  -144
  -152
  -160
  -168
  -177
  -186
Cash from investing activities, $m
  51
  -65
  -71
  -76
  -81
  -86
  -91
  -97
  -103
  -108
  -114
  -120
  -127
  -134
  -141
  -149
  -157
  -165
  -173
  -182
  -192
  -201
  -211
  -222
  -234
  -245
  -258
  -271
  -285
  -299
  -314
Free cash flow, $m
  109
  -4
  -7
  -11
  -14
  -17
  -20
  -23
  -26
  -29
  -33
  -36
  -39
  -42
  -45
  -49
  -52
  -56
  -59
  -63
  -67
  -71
  -75
  -80
  -84
  -89
  -94
  -100
  -105
  -111
  -117
Issuance/(repayment) of debt, $m
  -75
  11
  15
  17
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  50
  53
  56
  59
  62
  66
  69
  73
  77
  81
  85
  89
  94
  99
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  14
  15
  16
  17
  18
  19
  21
  22
  24
  25
Cash from financing (excl. dividends), $m  
  -77
  11
  15
  17
  20
  22
  24
  26
  28
  31
  34
  38
  41
  44
  48
  51
  55
  59
  63
  67
  71
  76
  81
  85
  90
  95
  100
  106
  111
  118
  124
Total cash flow (excl. dividends), $m
  32
  7
  8
  7
  6
  4
  3
  3
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Retained Cash Flow (-), $m
  15
  -11
  -14
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -75
  -79
  -83
  -88
Prev. year cash balance distribution, $m
 
  3
  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
 
  -1
  -6
  -9
  -12
  -15
  -18
  -20
  -23
  -25
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -41
  -43
  -45
  -48
  -51
  -53
  -56
  -59
  -62
  -66
  -69
  -73
  -77
  -80
Discount rate, %
 
  9.00
  9.45
  9.92
  10.42
  10.94
  11.49
  12.06
  12.66
  13.30
  13.96
  14.66
  15.39
  16.16
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.74
  23.88
  25.07
  26.33
  27.64
  29.03
  30.48
  32.00
  33.60
  35.28
  37.05
PV of cash for distribution, $m
 
  -1
  -5
  -7
  -8
  -9
  -9
  -9
  -9
  -8
  -7
  -6
  -5
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.9
  99.7
  99.2
  98.7
  98.0
  97.2
  96.2
  95.2
  94.2
  93.0
  91.8
  90.6
  89.3
  88.0
  86.7
  85.3
  84.0
  82.6
  81.2
  79.8
  78.5
  77.1
  75.7

Cedar Realty Trust, Inc. is an independent equity real estate investment trust. The firm is primarily engaged in ownership, operation, development, and redevelopment of properties. It invests in the real estate markets of the United States predominantly in mid- Atlantic and Northeast coastal states. The firm primarily invests in supermarket-anchored shopping centers. It benchmarks the performance of its portfolio against the NAREIT All Equity REIT Index and the Russell 2000 Index. Cedar Realty Trust, Inc. was founded in 1984 and is based in Port Washington, New York.

FINANCIAL RATIOS  of  Cedar Realty Trust (CDR)

Valuation Ratios
P/E Ratio 47.4
Price to Sales 2.8
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 7.4
Price to Free Cash Flow 16.4
Growth Rates
Sales Growth Rate 1.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25.6%
Cap. Spend. - 3 Yr. Gr. Rate -0.6%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 104.6%
Total Debt to Equity 104.6%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital 0.7%
Ret/ On T. Cap. - 3 Yr. Avg. 1.6%
Return On Equity 1.5%
Return On Equity - 3 Yr. Avg. 3.5%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 70.9%
Gross Margin - 3 Yr. Avg. 70.3%
EBITDA Margin 50.3%
EBITDA Margin - 3 Yr. Avg. 56.7%
Operating Margin 23.2%
Oper. Margin - 3 Yr. Avg. 30.2%
Pre-Tax Margin 6%
Pre-Tax Margin - 3 Yr. Avg. 11%
Net Profit Margin 6%
Net Profit Margin - 3 Yr. Avg. 13.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 344.4%

CDR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CDR stock intrinsic value calculation we used $151 million for the last fiscal year's total revenue generated by Cedar Realty Trust. The default revenue input number comes from 2016 income statement of Cedar Realty Trust. 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 CDR stock valuation model: a) initial revenue growth rate of 2% 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%, whose default value for CDR is calculated based on our internal credit rating of Cedar Realty Trust, 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 Cedar Realty Trust.
    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 CDR stock the variable cost ratio is equal to 66.2%.

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 CDR 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 4.1% for Cedar Realty Trust.

Corporate tax rate of 27% is the nominal tax rate for Cedar Realty Trust. 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 CDR 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 CDR are equal to 810.6%.

Life of production assets of 29.9 years is the average useful life of capital assets used in Cedar Realty Trust 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 CDR is equal to -2%. 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 - $581 million for Cedar Realty Trust - 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 85.858 million for Cedar Realty Trust 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 Cedar Realty Trust at the current share price and the inputted number of shares is $0.4 billion.

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COMPANY NEWS

▶ Cedar reports 1Q results   [May-04-17 05:28PM  Associated Press]
▶ Stocks Declining to Their 3-Year Lows   [Mar-04-17 07:19PM  GuruFocus.com]
▶ Cedar reports 4Q results   [04:51PM  Associated Press]
▶ Short Interest Jumped Big Time In These 5 Stocks This Month   [Aug-28-16 07:49PM  at Insider Monkey]
Stock chart of CDR Financial statements of CDR Annual reports of CDR
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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