Intrinsic value of Star Bulk Carriers - SBLK

Previous Close

$11.45

  Intrinsic Value

$4.04

stock screener

  Rating & Target

str. sell

-65%

Previous close

$11.45

 
Intrinsic value

$4.04

 
Up/down potential

-65%

 
Rating

str. sell

We calculate the intrinsic value of SBLK 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 0.7

 

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, %
  -5.13
  49.10
  44.69
  40.72
  37.15
  33.93
  31.04
  28.44
  26.09
  23.98
  22.09
  20.38
  18.84
  17.46
  16.21
  15.09
  14.08
  13.17
  12.35
  11.62
  10.96
  10.36
  9.83
  9.34
  8.91
  8.52
  8.17
  7.85
  7.56
  7.31
  7.08
Revenue, $m
  222
  331
  479
  674
  924
  1,238
  1,622
  2,084
  2,627
  3,257
  3,977
  4,787
  5,689
  6,682
  7,765
  8,937
  10,195
  11,538
  12,963
  14,469
  16,055
  17,718
  19,459
  21,277
  23,173
  25,147
  27,200
  29,335
  31,554
  33,860
  36,256
Variable operating expenses, $m
 
  935
  1,352
  1,903
  2,610
  3,496
  4,581
  5,884
  7,419
  9,199
  11,230
  13,519
  16,065
  18,870
  21,928
  25,237
  28,790
  32,582
  36,608
  40,861
  45,339
  50,037
  54,953
  60,087
  65,440
  71,014
  76,813
  82,842
  89,109
  95,621
  102,388
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
  334
  935
  1,352
  1,903
  2,610
  3,496
  4,581
  5,884
  7,419
  9,199
  11,230
  13,519
  16,065
  18,870
  21,928
  25,237
  28,790
  32,582
  36,608
  40,861
  45,339
  50,037
  54,953
  60,087
  65,440
  71,014
  76,813
  82,842
  89,109
  95,621
  102,388
Operating income, $m
  -112
  -604
  -874
  -1,229
  -1,686
  -2,258
  -2,959
  -3,800
  -4,792
  -5,941
  -7,254
  -8,732
  -10,376
  -12,188
  -14,163
  -16,300
  -18,595
  -21,045
  -23,645
  -26,392
  -29,284
  -32,318
  -35,494
  -38,810
  -42,267
  -45,867
  -49,613
  -53,507
  -57,555
  -61,761
  -66,131
EBITDA, $m
  -30
  -481
  -696
  -980
  -1,344
  -1,800
  -2,359
  -3,030
  -3,820
  -4,736
  -5,782
  -6,961
  -8,272
  -9,716
  -11,291
  -12,994
  -14,824
  -16,776
  -18,849
  -21,039
  -23,344
  -25,763
  -28,295
  -30,938
  -33,694
  -36,564
  -39,550
  -42,654
  -45,881
  -49,234
  -52,718
Interest expense (income), $m
  48
  47
  71
  104
  146
  201
  270
  354
  455
  574
  712
  870
  1,047
  1,245
  1,462
  1,699
  1,956
  2,232
  2,526
  2,838
  3,168
  3,515
  3,879
  4,261
  4,659
  5,074
  5,506
  5,956
  6,423
  6,909
  7,414
Earnings before tax, $m
  -154
  -651
  -945
  -1,333
  -1,832
  -2,459
  -3,229
  -4,154
  -5,247
  -6,516
  -7,966
  -9,601
  -11,424
  -13,432
  -15,625
  -18,000
  -20,551
  -23,276
  -26,170
  -29,230
  -32,452
  -35,833
  -39,373
  -43,070
  -46,926
  -50,941
  -55,119
  -59,463
  -63,978
  -68,670
  -73,546
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
  -154
  -651
  -945
  -1,333
  -1,832
  -2,459
  -3,229
  -4,154
  -5,247
  -6,516
  -7,966
  -9,601
  -11,424
  -13,432
  -15,625
  -18,000
  -20,551
  -23,276
  -26,170
  -29,230
  -32,452
  -35,833
  -39,373
  -43,070
  -46,926
  -50,941
  -55,119
  -59,463
  -63,978
  -68,670
  -73,546

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  182
  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
  2,012
  2,736
  3,958
  5,570
  7,639
  10,231
  13,407
  17,219
  21,713
  26,920
  32,865
  39,562
  47,015
  55,222
  64,173
  73,856
  84,255
  95,353
  107,133
  119,581
  132,684
  146,432
  160,820
  175,845
  191,510
  207,823
  224,793
  242,438
  260,777
  279,834
  299,639
Adjusted assets (=assets-cash), $m
  1,830
  2,736
  3,958
  5,570
  7,639
  10,231
  13,407
  17,219
  21,713
  26,920
  32,865
  39,562
  47,015
  55,222
  64,173
  73,856
  84,255
  95,353
  107,133
  119,581
  132,684
  146,432
  160,820
  175,845
  191,510
  207,823
  224,793
  242,438
  260,777
  279,834
  299,639
Revenue / Adjusted assets
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
Average production assets, $m
  1,733
  2,584
  3,739
  5,261
  7,215
  9,664
  12,663
  16,264
  20,508
  25,427
  31,042
  37,368
  44,407
  52,159
  60,613
  69,759
  79,581
  90,063
  101,190
  112,948
  125,324
  138,309
  151,899
  166,090
  180,886
  196,294
  212,323
  228,989
  246,311
  264,311
  283,017
Working capital, $m
  200
  36
  52
  73
  100
  134
  175
  225
  284
  352
  429
  517
  614
  722
  839
  965
  1,101
  1,246
  1,400
  1,563
  1,734
  1,914
  2,102
  2,298
  2,503
  2,716
  2,938
  3,168
  3,408
  3,657
  3,916
Total debt, $m
  951
  1,426
  2,074
  2,928
  4,025
  5,399
  7,082
  9,102
  11,484
  14,244
  17,395
  20,944
  24,894
  29,244
  33,988
  39,120
  44,631
  50,513
  56,757
  63,354
  70,299
  77,585
  85,211
  93,174
  101,476
  110,122
  119,116
  128,468
  138,188
  148,288
  158,785
Total liabilities, $m
  974
  1,450
  2,098
  2,952
  4,049
  5,423
  7,106
  9,126
  11,508
  14,268
  17,419
  20,968
  24,918
  29,268
  34,012
  39,144
  44,655
  50,537
  56,781
  63,378
  70,323
  77,609
  85,235
  93,198
  101,500
  110,146
  119,140
  128,492
  138,212
  148,312
  158,809
Total equity, $m
  1,037
  1,286
  1,860
  2,618
  3,590
  4,809
  6,301
  8,093
  10,205
  12,652
  15,447
  18,594
  22,097
  25,954
  30,161
  34,712
  39,600
  44,816
  50,353
  56,203
  62,362
  68,823
  75,585
  82,647
  90,010
  97,677
  105,653
  113,946
  122,565
  131,522
  140,830
Total liabilities and equity, $m
  2,011
  2,736
  3,958
  5,570
  7,639
  10,232
  13,407
  17,219
  21,713
  26,920
  32,866
  39,562
  47,015
  55,222
  64,173
  73,856
  84,255
  95,353
  107,134
  119,581
  132,685
  146,432
  160,820
  175,845
  191,510
  207,823
  224,793
  242,438
  260,777
  279,834
  299,639
Debt-to-equity ratio
  0.917
  1.110
  1.110
  1.120
  1.120
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
Adjusted equity ratio
  0.467
  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
  -154
  -651
  -945
  -1,333
  -1,832
  -2,459
  -3,229
  -4,154
  -5,247
  -6,516
  -7,966
  -9,601
  -11,424
  -13,432
  -15,625
  -18,000
  -20,551
  -23,276
  -26,170
  -29,230
  -32,452
  -35,833
  -39,373
  -43,070
  -46,926
  -50,941
  -55,119
  -59,463
  -63,978
  -68,670
  -73,546
Depreciation, amort., depletion, $m
  82
  122
  177
  249
  342
  458
  600
  771
  972
  1,205
  1,471
  1,771
  2,105
  2,472
  2,873
  3,306
  3,772
  4,268
  4,796
  5,353
  5,940
  6,555
  7,199
  7,872
  8,573
  9,303
  10,063
  10,853
  11,673
  12,527
  13,413
Funds from operations, $m
  -43
  -529
  -768
  -1,084
  -1,490
  -2,001
  -2,629
  -3,384
  -4,275
  -5,310
  -6,495
  -7,830
  -9,319
  -10,960
  -12,753
  -14,694
  -16,780
  -19,008
  -21,375
  -23,877
  -26,512
  -29,278
  -32,174
  -35,199
  -38,353
  -41,638
  -45,056
  -48,610
  -52,304
  -56,143
  -60,133
Change in working capital, $m
  -10
  12
  16
  21
  27
  34
  42
  50
  59
  68
  78
  88
  97
  107
  117
  127
  136
  145
  154
  163
  171
  180
  188
  196
  205
  213
  222
  231
  240
  249
  259
Cash from operations, $m
  -33
  -540
  -784
  -1,105
  -1,517
  -2,035
  -2,670
  -3,434
  -4,334
  -5,379
  -6,572
  -7,918
  -9,416
  -11,068
  -12,870
  -14,820
  -16,916
  -19,153
  -21,529
  -24,040
  -26,683
  -29,458
  -32,362
  -35,395
  -38,558
  -41,851
  -45,278
  -48,841
  -52,544
  -56,392
  -60,392
Maintenance CAPEX, $m
  0
  -82
  -122
  -177
  -249
  -342
  -458
  -600
  -771
  -972
  -1,205
  -1,471
  -1,771
  -2,105
  -2,472
  -2,873
  -3,306
  -3,772
  -4,268
  -4,796
  -5,353
  -5,940
  -6,555
  -7,199
  -7,872
  -8,573
  -9,303
  -10,063
  -10,853
  -11,673
  -12,527
New CAPEX, $m
  -396
  -851
  -1,155
  -1,522
  -1,954
  -2,448
  -3,000
  -3,601
  -4,244
  -4,919
  -5,616
  -6,325
  -7,040
  -7,751
  -8,455
  -9,146
  -9,822
  -10,482
  -11,127
  -11,757
  -12,376
  -12,985
  -13,589
  -14,192
  -14,796
  -15,407
  -16,029
  -16,666
  -17,322
  -18,000
  -18,706
Cash from investing activities, $m
  -13
  -933
  -1,277
  -1,699
  -2,203
  -2,790
  -3,458
  -4,201
  -5,015
  -5,891
  -6,821
  -7,796
  -8,811
  -9,856
  -10,927
  -12,019
  -13,128
  -14,254
  -15,395
  -16,553
  -17,729
  -18,925
  -20,144
  -21,391
  -22,668
  -23,980
  -25,332
  -26,729
  -28,175
  -29,673
  -31,233
Free cash flow, $m
  -46
  -1,473
  -2,061
  -2,804
  -3,721
  -4,826
  -6,128
  -7,635
  -9,349
  -11,269
  -13,393
  -15,714
  -18,227
  -20,924
  -23,796
  -26,839
  -30,044
  -33,407
  -36,924
  -40,593
  -44,412
  -48,383
  -52,506
  -56,786
  -61,225
  -65,831
  -70,610
  -75,570
  -80,718
  -86,066
  -91,624
Issuance/(repayment) of debt, $m
  -29
  481
  648
  854
  1,097
  1,374
  1,683
  2,021
  2,381
  2,760
  3,151
  3,549
  3,950
  4,350
  4,744
  5,132
  5,511
  5,882
  6,244
  6,597
  6,945
  7,287
  7,625
  7,963
  8,303
  8,646
  8,994
  9,352
  9,720
  10,100
  10,496
Issuance/(repurchase) of shares, $m
  51
  1,076
  1,519
  2,091
  2,805
  3,678
  4,722
  5,946
  7,359
  8,963
  10,760
  12,749
  14,927
  17,290
  19,833
  22,551
  25,439
  28,492
  31,707
  35,080
  38,610
  42,295
  46,135
  50,132
  54,288
  58,608
  63,095
  67,756
  72,597
  77,627
  82,854
Cash from financing (excl. dividends), $m  
  20
  1,557
  2,167
  2,945
  3,902
  5,052
  6,405
  7,967
  9,740
  11,723
  13,911
  16,298
  18,877
  21,640
  24,577
  27,683
  30,950
  34,374
  37,951
  41,677
  45,555
  49,582
  53,760
  58,095
  62,591
  67,254
  72,089
  77,108
  82,317
  87,727
  93,350
Total cash flow (excl. dividends), $m
  -26
  83
  107
  140
  180
  226
  277
  332
  392
  454
  518
  584
  650
  715
  780
  844
  906
  967
  1,027
  1,085
  1,142
  1,198
  1,254
  1,310
  1,366
  1,422
  1,479
  1,538
  1,599
  1,661
  1,726
Retained Cash Flow (-), $m
  98
  -1,076
  -1,519
  -2,091
  -2,805
  -3,678
  -4,722
  -5,946
  -7,359
  -8,963
  -10,760
  -12,749
  -14,927
  -17,290
  -19,833
  -22,551
  -25,439
  -28,492
  -31,707
  -35,080
  -38,610
  -42,295
  -46,135
  -50,132
  -54,288
  -58,608
  -63,095
  -67,756
  -72,597
  -77,627
  -82,854
Prev. year cash balance distribution, $m
 
  176
  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
 
  -816
  -1,413
  -1,950
  -2,624
  -3,452
  -4,445
  -5,614
  -6,967
  -8,509
  -10,242
  -12,165
  -14,277
  -16,574
  -19,052
  -21,707
  -24,532
  -27,525
  -30,680
  -33,995
  -37,468
  -41,096
  -44,881
  -48,822
  -52,923
  -57,186
  -61,616
  -66,218
  -70,999
  -75,966
  -81,128
Discount rate, %
 
  8.70
  9.14
  9.59
  10.07
  10.57
  11.10
  11.66
  12.24
  12.85
  13.50
  14.17
  14.88
  15.62
  16.41
  17.23
  18.09
  18.99
  19.94
  20.94
  21.98
  23.08
  24.24
  25.45
  26.72
  28.06
  29.46
  30.93
  32.48
  34.11
  35.81
PV of cash for distribution, $m
 
  -751
  -1,186
  -1,482
  -1,788
  -2,088
  -2,363
  -2,594
  -2,766
  -2,866
  -2,888
  -2,831
  -2,702
  -2,511
  -2,272
  -2,001
  -1,716
  -1,432
  -1,163
  -918
  -704
  -524
  -379
  -265
  -180
  -118
  -75
  -46
  -27
  -15
  -8
Current shareholders' claim on cash, %
  100
  36.2
  13.6
  5.2
  2.1
  0.9
  0.4
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company's fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company's vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company's fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company's Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

FINANCIAL RATIOS  of  Star Bulk Carriers (SBLK)

Valuation Ratios
P/E Ratio -4.2
Price to Sales 2.9
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow -19.6
Price to Free Cash Flow -1.5
Growth Rates
Sales Growth Rate -5.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.5%
Cap. Spend. - 3 Yr. Gr. Rate 25.3%
Financial Strength
Quick Ratio 30
Current Ratio 0.4
LT Debt to Equity 91.1%
Total Debt to Equity 91.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -5.1%
Ret/ On Assets - 3 Yr. Avg. -8.6%
Return On Total Capital -7.5%
Ret/ On T. Cap. - 3 Yr. Avg. -10.3%
Return On Equity -14.2%
Return On Equity - 3 Yr. Avg. -18.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 26.1%
Gross Margin - 3 Yr. Avg. 27.1%
EBITDA Margin -10.8%
EBITDA Margin - 3 Yr. Avg. -45.9%
Operating Margin -50.5%
Oper. Margin - 3 Yr. Avg. -78.1%
Pre-Tax Margin -69.4%
Pre-Tax Margin - 3 Yr. Avg. -91.1%
Net Profit Margin -69.4%
Net Profit Margin - 3 Yr. Avg. -91.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SBLK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SBLK stock intrinsic value calculation we used $222 million for the last fiscal year's total revenue generated by Star Bulk Carriers. The default revenue input number comes from 2016 income statement of Star Bulk Carriers. 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 SBLK stock valuation model: a) initial revenue growth rate of 49.1% 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 8.7%, whose default value for SBLK is calculated based on our internal credit rating of Star Bulk Carriers, 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 Star Bulk Carriers.
    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 SBLK stock the variable cost ratio is equal to 282.4%.

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 SBLK 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 5% for Star Bulk Carriers.

Corporate tax rate of 27% is the nominal tax rate for Star Bulk Carriers. 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 SBLK 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 SBLK are equal to 780.6%.

Life of production assets of 21.1 years is the average useful life of capital assets used in Star Bulk Carriers 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 SBLK is equal to 10.8%. 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 - $1037 million for Star Bulk Carriers - 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 64.153 million for Star Bulk Carriers 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 Star Bulk Carriers at the current share price and the inputted number of shares is $0.7 billion.

RELATED COMPANIES Price Int.Val. Rating
SHIP Seanergy Marit 1.08 3.05  str.buy
GOGL Golden Ocean G 8.37 2.20  str.sell
ESEA Euroseas 1.82 1.97  hold
DSX Diana Shipping 4.06 2.55  sell
GLBS Globus Maritim 1.22 0.19  str.sell

COMPANY NEWS

▶ Star Bulk Carriers reports 3Q loss   [Nov-20-17 05:06AM  Associated Press]
▶ Why Star Bulk Carriers Stock Sank 18% in May   [Jun-07-17 04:30PM  Motley Fool]
▶ Star Bulk Carriers Stock Upgraded: What You Need to Know   [May-26-17 12:45PM  Motley Fool]
▶ Star Bulk Carriers reports 1Q loss   [May-24-17 05:32PM  Associated Press]
▶ Why DryShips Inc. Stock Growth Is No Sure Thing   [May-22-17 12:30PM  Motley Fool]
▶ Is Management Really to Blame for DryShips Inc.'s Woes?   [May-15-17 04:30PM  Motley Fool]
▶ Why Star Bulk Carriers Stock Sank 20% in April   [May-08-17 05:47PM  Motley Fool]
▶ Why Diana Shipping Stock Soared 17%   [Apr-07-17 01:31PM  Motley Fool]
▶ Shipping stocks rocket after analyst calls the bottom   [Mar-29-17 07:36AM  MarketWatch]
▶ Why Dry Bulk Shipping Stocks Popped Today   [12:22PM  Motley Fool]
▶ Why Dry Bulk Shipping Stocks Popped Today   [12:22PM  at Motley Fool]
▶ DryShips Inc. Finally Starts to Bulk Up   [12:17PM  Motley Fool]
▶ DryShips Inc. Finally Starts to Bulk Up   [12:17PM  at Motley Fool]
▶ Why Shipping Stocks Surged -- and DryShips Dropped -- Today   [Jan-18-17 07:56PM  at Motley Fool]
▶ Is Star Bulk Carriers Corp. (SBLK) A Good Stock To Buy?   [Dec-18-16 10:12AM  at Insider Monkey]
Financial statements of SBLK
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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