Intrinsic value of Cresud ADR - CRESY

Previous Close

$20.60

  Intrinsic Value

$4,360

stock screener

  Rating & Target

str. buy

+999%

Previous close

$20.60

 
Intrinsic value

$4,360

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CRESY 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 2017), $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 1.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  127.61
  52.40
  47.66
  43.39
  39.55
  36.10
  32.99
  30.19
  27.67
  25.40
  23.36
  21.53
  19.87
  18.39
  17.05
  15.84
  14.76
  13.78
  12.90
  12.11
  11.40
  10.76
  10.19
  9.67
  9.20
  8.78
  8.40
  8.06
  7.76
  7.48
  7.23
Revenue, $m
  4,987
  7,600
  11,222
  16,092
  22,458
  30,565
  40,648
  52,919
  67,563
  84,726
  104,521
  127,022
  152,267
  180,265
  210,997
  244,427
  280,502
  319,165
  360,353
  404,008
  450,077
  498,518
  549,299
  602,404
  657,832
  715,596
  775,726
  838,269
  903,288
  970,860
  1,041,078
Variable operating expenses, $m
 
  3,114
  4,590
  6,574
  9,167
  12,470
  16,577
  21,577
  27,542
  34,535
  42,599
  51,748
  62,032
  73,438
  85,958
  99,577
  114,274
  130,025
  146,805
  164,589
  183,357
  203,092
  223,779
  245,414
  267,995
  291,527
  316,023
  341,503
  367,991
  395,519
  424,126
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
  4,352
  3,114
  4,590
  6,574
  9,167
  12,470
  16,577
  21,577
  27,542
  34,535
  42,599
  51,748
  62,032
  73,438
  85,958
  99,577
  114,274
  130,025
  146,805
  164,589
  183,357
  203,092
  223,779
  245,414
  267,995
  291,527
  316,023
  341,503
  367,991
  395,519
  424,126
Operating income, $m
  635
  4,486
  6,633
  9,518
  13,291
  18,095
  24,070
  31,342
  40,020
  50,192
  61,922
  75,275
  90,235
  106,827
  125,039
  144,850
  166,228
  189,140
  213,549
  239,419
  266,720
  295,426
  325,520
  356,991
  389,837
  424,069
  459,703
  496,766
  535,297
  575,341
  616,953
EBITDA, $m
  946
  4,948
  7,307
  10,478
  14,622
  19,900
  26,466
  34,456
  43,990
  55,165
  68,054
  82,704
  99,141
  117,370
  137,380
  159,146
  182,635
  207,808
  234,625
  263,049
  293,044
  324,584
  357,648
  392,224
  428,313
  465,923
  505,073
  545,795
  588,129
  632,125
  677,844
Interest expense (income), $m
  379
  337
  563
  960
  1,494
  2,191
  3,080
  4,185
  5,529
  7,134
  9,015
  11,184
  13,650
  16,416
  19,485
  22,852
  26,516
  30,469
  34,706
  39,220
  44,004
  49,052
  54,360
  59,925
  65,745
  71,819
  78,149
  84,738
  91,592
  98,717
  106,122
Earnings before tax, $m
  312
  4,149
  6,070
  8,559
  11,797
  15,904
  20,991
  27,158
  34,491
  43,058
  52,907
  64,090
  76,585
  90,410
  105,554
  121,997
  139,713
  158,671
  178,843
  200,199
  222,716
  246,374
  271,159
  297,065
  324,092
  352,250
  381,553
  412,028
  443,705
  476,623
  510,831
Tax expense, $m
  183
  1,120
  1,639
  2,311
  3,185
  4,294
  5,667
  7,333
  9,313
  11,626
  14,285
  17,304
  20,678
  24,411
  28,500
  32,939
  37,722
  42,841
  48,288
  54,054
  60,133
  66,521
  73,213
  80,208
  87,505
  95,107
  103,019
  111,248
  119,800
  128,688
  137,924
Net income, $m
  97
  3,029
  4,431
  6,248
  8,612
  11,610
  15,323
  19,825
  25,178
  31,432
  38,622
  46,786
  55,907
  66,000
  77,055
  89,058
  101,990
  115,830
  130,555
  146,146
  162,583
  179,853
  197,946
  216,858
  236,587
  257,142
  278,534
  300,780
  323,904
  347,935
  372,906

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,531
  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
  15,452
  19,690
  29,074
  41,690
  58,180
  79,183
  105,304
  137,096
  175,033
  219,498
  270,781
  329,073
  394,475
  467,008
  546,625
  633,230
  726,690
  826,852
  933,557
  1,046,653
  1,166,003
  1,291,497
  1,423,055
  1,560,633
  1,704,228
  1,853,875
  2,009,653
  2,171,682
  2,340,124
  2,515,181
  2,697,094
Adjusted assets (=assets-cash), $m
  12,921
  19,690
  29,074
  41,690
  58,180
  79,183
  105,304
  137,096
  175,033
  219,498
  270,781
  329,073
  394,475
  467,008
  546,625
  633,230
  726,690
  826,852
  933,557
  1,046,653
  1,166,003
  1,291,497
  1,423,055
  1,560,633
  1,704,228
  1,853,875
  2,009,653
  2,171,682
  2,340,124
  2,515,181
  2,697,094
Revenue / Adjusted assets
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
Average production assets, $m
  2,507
  3,823
  5,645
  8,094
  11,296
  15,374
  20,446
  26,618
  33,984
  42,617
  52,574
  63,892
  76,590
  90,673
  106,132
  122,947
  141,093
  160,540
  181,258
  203,216
  226,389
  250,755
  276,298
  303,009
  330,889
  359,945
  390,190
  421,649
  454,354
  488,343
  523,662
Working capital, $m
  1,099
  91
  135
  193
  269
  367
  488
  635
  811
  1,017
  1,254
  1,524
  1,827
  2,163
  2,532
  2,933
  3,366
  3,830
  4,324
  4,848
  5,401
  5,982
  6,592
  7,229
  7,894
  8,587
  9,309
  10,059
  10,839
  11,650
  12,493
Total debt, $m
  8,660
  11,979
  20,424
  31,779
  46,620
  65,522
  89,032
  117,645
  151,787
  191,806
  237,961
  290,424
  349,285
  414,565
  486,221
  564,165
  648,279
  738,425
  834,460
  936,246
  1,043,661
  1,156,605
  1,275,008
  1,398,828
  1,528,063
  1,662,745
  1,802,946
  1,948,772
  2,100,370
  2,257,921
  2,421,643
Total liabilities, $m
  14,403
  17,721
  26,166
  37,521
  52,362
  71,264
  94,774
  123,387
  157,529
  197,548
  243,703
  296,166
  355,027
  420,307
  491,963
  569,907
  654,021
  744,167
  840,202
  941,988
  1,049,403
  1,162,347
  1,280,750
  1,404,570
  1,533,805
  1,668,487
  1,808,688
  1,954,514
  2,106,112
  2,263,663
  2,427,385
Total equity, $m
  1,050
  1,969
  2,907
  4,169
  5,818
  7,918
  10,530
  13,710
  17,503
  21,950
  27,078
  32,907
  39,447
  46,701
  54,663
  63,323
  72,669
  82,685
  93,356
  104,665
  116,600
  129,150
  142,306
  156,063
  170,423
  185,387
  200,965
  217,168
  234,012
  251,518
  269,709
Total liabilities and equity, $m
  15,453
  19,690
  29,073
  41,690
  58,180
  79,182
  105,304
  137,097
  175,032
  219,498
  270,781
  329,073
  394,474
  467,008
  546,626
  633,230
  726,690
  826,852
  933,558
  1,046,653
  1,166,003
  1,291,497
  1,423,056
  1,560,633
  1,704,228
  1,853,874
  2,009,653
  2,171,682
  2,340,124
  2,515,181
  2,697,094
Debt-to-equity ratio
  8.248
  6.080
  7.030
  7.620
  8.010
  8.270
  8.450
  8.580
  8.670
  8.740
  8.790
  8.830
  8.850
  8.880
  8.890
  8.910
  8.920
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
Adjusted equity ratio
  -0.114
  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
  97
  3,029
  4,431
  6,248
  8,612
  11,610
  15,323
  19,825
  25,178
  31,432
  38,622
  46,786
  55,907
  66,000
  77,055
  89,058
  101,990
  115,830
  130,555
  146,146
  162,583
  179,853
  197,946
  216,858
  236,587
  257,142
  278,534
  300,780
  323,904
  347,935
  372,906
Depreciation, amort., depletion, $m
  311
  463
  674
  959
  1,332
  1,806
  2,395
  3,113
  3,970
  4,973
  6,131
  7,429
  8,906
  10,543
  12,341
  14,296
  16,406
  18,667
  21,076
  23,630
  26,324
  29,158
  32,128
  35,234
  38,476
  41,854
  45,371
  49,029
  52,832
  56,784
  60,891
Funds from operations, $m
  594
  3,491
  5,105
  7,207
  9,943
  13,415
  17,719
  22,938
  29,148
  36,406
  44,754
  54,215
  64,813
  76,543
  89,396
  103,354
  118,396
  134,497
  151,632
  169,775
  188,907
  209,011
  230,074
  252,091
  275,063
  298,996
  323,905
  349,809
  376,736
  404,719
  433,797
Change in working capital, $m
  13
  31
  43
  58
  76
  97
  121
  147
  176
  206
  238
  270
  303
  336
  369
  401
  433
  464
  494
  524
  553
  581
  609
  637
  665
  693
  722
  751
  780
  811
  843
Cash from operations, $m
  581
  3,460
  5,062
  7,148
  9,867
  13,318
  17,598
  22,791
  28,972
  36,200
  44,516
  53,945
  64,510
  76,207
  89,027
  102,953
  117,963
  134,033
  151,137
  169,251
  188,354
  208,429
  229,465
  251,454
  274,398
  298,303
  323,183
  349,059
  375,956
  403,908
  432,955
Maintenance CAPEX, $m
  0
  -291
  -445
  -656
  -941
  -1,314
  -1,788
  -2,377
  -3,095
  -3,952
  -4,955
  -6,113
  -7,429
  -8,906
  -10,543
  -12,341
  -14,296
  -16,406
  -18,667
  -21,076
  -23,630
  -26,324
  -29,158
  -32,128
  -35,234
  -38,476
  -41,854
  -45,371
  -49,029
  -52,832
  -56,784
New CAPEX, $m
  -266
  -1,316
  -1,822
  -2,450
  -3,202
  -4,078
  -5,072
  -6,173
  -7,366
  -8,633
  -9,957
  -11,318
  -12,698
  -14,083
  -15,458
  -16,815
  -18,146
  -19,447
  -20,718
  -21,958
  -23,173
  -24,366
  -25,543
  -26,712
  -27,880
  -29,055
  -30,246
  -31,459
  -32,704
  -33,989
  -35,320
Cash from investing activities, $m
  -155
  -1,607
  -2,267
  -3,106
  -4,143
  -5,392
  -6,860
  -8,550
  -10,461
  -12,585
  -14,912
  -17,431
  -20,127
  -22,989
  -26,001
  -29,156
  -32,442
  -35,853
  -39,385
  -43,034
  -46,803
  -50,690
  -54,701
  -58,840
  -63,114
  -67,531
  -72,100
  -76,830
  -81,733
  -86,821
  -92,104
Free cash flow, $m
  426
  1,852
  2,795
  4,043
  5,724
  7,927
  10,738
  14,241
  18,511
  23,615
  29,604
  36,514
  44,382
  53,218
  63,025
  73,797
  85,521
  98,180
  111,752
  126,217
  141,552
  157,740
  174,764
  192,614
  211,284
  230,772
  251,084
  272,229
  294,223
  317,088
  340,851
Issuance/(repayment) of debt, $m
  479
  4,809
  8,446
  11,355
  14,841
  18,902
  23,510
  28,613
  34,143
  40,019
  46,155
  52,463
  58,862
  65,279
  71,656
  77,945
  84,114
  90,146
  96,035
  101,786
  107,415
  112,944
  118,402
  123,820
  129,235
  134,682
  140,200
  145,826
  151,598
  157,551
  163,722
Issuance/(repurchase) of shares, $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
Cash from financing (excl. dividends), $m  
  289
  4,809
  8,446
  11,355
  14,841
  18,902
  23,510
  28,613
  34,143
  40,019
  46,155
  52,463
  58,862
  65,279
  71,656
  77,945
  84,114
  90,146
  96,035
  101,786
  107,415
  112,944
  118,402
  123,820
  129,235
  134,682
  140,200
  145,826
  151,598
  157,551
  163,722
Total cash flow (excl. dividends), $m
  888
  6,661
  11,241
  15,397
  20,565
  26,829
  34,248
  42,854
  52,654
  63,634
  75,758
  88,977
  103,244
  118,498
  134,681
  151,742
  169,635
  188,326
  207,787
  228,003
  248,967
  270,684
  293,166
  316,435
  340,519
  365,455
  391,284
  418,055
  445,821
  474,639
  504,572
Retained Cash Flow (-), $m
  -176
  -1,960
  -938
  -1,262
  -1,649
  -2,100
  -2,612
  -3,179
  -3,794
  -4,447
  -5,128
  -5,829
  -6,540
  -7,253
  -7,962
  -8,661
  -9,346
  -10,016
  -10,671
  -11,310
  -11,935
  -12,549
  -13,156
  -13,758
  -14,359
  -14,965
  -15,578
  -16,203
  -16,844
  -17,506
  -18,191
Prev. year cash balance distribution, $m
 
  1,041
  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
 
  5,742
  10,302
  14,136
  18,916
  24,729
  31,636
  39,675
  48,860
  59,187
  70,630
  83,148
  96,704
  111,244
  126,719
  143,081
  160,289
  178,310
  197,116
  216,693
  237,032
  258,135
  280,010
  302,677
  326,160
  350,490
  375,706
  401,852
  428,976
  457,133
  486,381
Discount rate, %
 
  10.20
  10.71
  11.25
  11.81
  12.40
  13.02
  13.67
  14.35
  15.07
  15.82
  16.61
  17.45
  18.32
  19.23
  20.20
  21.21
  22.27
  23.38
  24.55
  25.77
  27.06
  28.42
  29.84
  31.33
  32.90
  34.54
  36.27
  38.08
  39.99
  41.98
PV of cash for distribution, $m
 
  5,210
  8,406
  10,268
  12,104
  13,785
  15,181
  16,181
  16,711
  16,733
  16,256
  15,331
  14,041
  12,492
  10,796
  9,063
  7,389
  5,848
  4,492
  3,346
  2,415
  1,688
  1,142
  746
  471
  286
  168
  95
  51
  27
  13
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

Cresud Sociedad Anonima Comercial, Inmobiliaria, Financiera y Agropecuaria is an agricultural company engaged in the production of basic agricultural commodities with presence in the agricultural sector of Brazil, through its investment in Brasilagro, as well as in other Latin American countries. In addition, the Company leases lands to third parties and perform agency and agro-industrial services, including a meat packing plant. It operates in two businesses areas, namely, Agricultural and Investment and Development Properties. Its Agricultural business comprises eight segments: Crops, Cattle, Dairy, Sugarcane, Agricultural Rentals and Services, Land Transformation and Sales, Agro-industrial and Others. The Company's Investment and Development Properties comprises six segments: Shopping Center Properties, Offices, Sales and Developments, Hotels, International, and Financial Operations and Others. The Company's main crops include soybean, wheat, corn and sunflower.

FINANCIAL RATIOS  of  Cresud ADR (CRESY)

Valuation Ratios
P/E Ratio 105.4
Price to Sales 2
Price to Book 9.7
Price to Tangible Book
Price to Cash Flow 17.6
Price to Free Cash Flow 32.4
Growth Rates
Sales Growth Rate 127.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 228.4%
Cap. Spend. - 3 Yr. Gr. Rate 92.7%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 682.9%
Total Debt to Equity 824.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.8%
Ret/ On Assets - 3 Yr. Avg. 4.2%
Return On Total Capital 1.1%
Ret/ On T. Cap. - 3 Yr. Avg. 3%
Return On Equity 10.1%
Return On Equity - 3 Yr. Avg. 25.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 27%
Gross Margin - 3 Yr. Avg. 23.4%
EBITDA Margin 20.1%
EBITDA Margin - 3 Yr. Avg. 38.5%
Operating Margin 12.7%
Oper. Margin - 3 Yr. Avg. 40.4%
Pre-Tax Margin 6.3%
Pre-Tax Margin - 3 Yr. Avg. 21.9%
Net Profit Margin 1.9%
Net Profit Margin - 3 Yr. Avg. 6%
Effective Tax Rate 58.7%
Eff/ Tax Rate - 3 Yr. Avg. 43.3%
Payout Ratio 172.2%

CRESY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRESY stock intrinsic value calculation we used $4987 million for the last fiscal year's total revenue generated by Cresud ADR. The default revenue input number comes from 2017 income statement of Cresud ADR. 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 CRESY stock valuation model: a) initial revenue growth rate of 52.4% 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 10.2%, whose default value for CRESY is calculated based on our internal credit rating of Cresud ADR, 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 Cresud ADR.
    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 CRESY stock the variable cost ratio is equal to 41.1%.

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 CRESY 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 4.7% for Cresud ADR.

Corporate tax rate of 27% is the nominal tax rate for Cresud ADR. 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 CRESY 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 CRESY are equal to 50.3%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Cresud ADR 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 CRESY is equal to 1.2%. 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 - $1050 million for Cresud ADR - 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 50.628 million for Cresud ADR 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 Cresud ADR at the current share price and the inputted number of shares is $1.0 billion.

RELATED COMPANIES Price Int.Val. Rating
ALCO Alico 31.40 5.18  str.sell
AGRO Adecoagro 10.15 108.05  str.buy
IRCP IRSA Propiedad 55.30 2,850.24  str.buy
BG Bunge 66.22 395.84  str.buy

COMPANY NEWS

▶ Cresud posts 1Q profit   [Nov-14-17 05:01AM  Associated Press]
▶ ETFs with exposure to Cresud SA : November 10, 2017   [Nov-10-17 12:06PM  Capital Cube]
▶ ETFs with exposure to Cresud SA : August 4, 2017   [Aug-04-17 07:29PM  Capital Cube]
▶ ETFs with exposure to Cresud SA : June 23, 2017   [Jun-23-17 02:15PM  Capital Cube]
▶ ETFs with exposure to Cresud SA : June 13, 2017   [Jun-13-17 12:23PM  Capital Cube]
▶ ETFs with exposure to Cresud SA : April 5, 2017   [Apr-05-17 04:34PM  Capital Cube]
▶ Cresud posts 2Q profit   [Feb-13-17 02:36PM  Associated Press]
▶ ETFs with exposure to Cresud SA : January 3, 2017   [Jan-03-17 01:53PM  Capital Cube]
▶ ETFs with exposure to Cresud SA : December 14, 2016   [Dec-14-16 11:38AM  Capital Cube]
▶ Is Iridium Communications Inc (IRDM) A Good Stock To Buy?   [Dec-09-16 07:28PM  Insider Monkey]
▶ The 'Trump Effect' On Latin America, Explained   [Nov-28-16 08:34AM  Benzinga]
▶ Cresud S.A.C.I.F. y A. Material Fact   [Nov-20  09:59AM  PR Newswire]
▶ How To Invest In Farming Without Owning a Farm   [Sep-16  05:01PM  at Investopedia]
▶ Cresud Sacifya (CRESY) Downgraded From Hold to Sell   [Nov-14  09:30AM  at TheStreet]
▶ Earnings Release 1Q15   [Nov-11  08:39PM  at noodls]
▶ Will Better Soybean Prices Boost Cresud?   [Jun-02  02:16PM  at Motley Fool]
▶ Cresud SA Stock Upgraded (CRESY)   [May-29  11:11AM  at TheStreet]
▶ SA PRO: Top Long And Short Ideas, Monday April 14   [Apr-15  05:00AM  at Seeking Alpha]
▶ Wall Street Breakfast: Must-Know News   [Apr-14  06:31AM  at Seeking Alpha]
▶ 3 Stocks Spiking on Unusual Volume   [Apr-08  08:05AM  at TheStreet]
▶ Macro Events Buffeting Adecoagro   [Mar-22  10:07AM  at Seeking Alpha]
▶ Better Times, Worse Times For Cresud   [Dec-19  09:37AM  at Seeking Alpha]
▶ Opportunities in Agriculture   [Nov-13  10:20AM  at TheStreet]
Financial statements of CRESY
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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