Intrinsic value of Stonegate Mortgage - SGM

Previous Close

$7.99

  Intrinsic Value

$35.28

stock screener

  Rating & Target

str. buy

+342%

  Value-price divergence*

+5000%

Previous close

$7.99

 
Intrinsic value

$35.28

 
Up/down potential

+342%

 
Rating

str. buy

 
Value-price divergence*

+5000%

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

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

We calculate the intrinsic value of SGM 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, %
  -3.83
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  176
  282
  435
  651
  944
  1,332
  1,831
  2,458
  3,227
  4,153
  5,245
  6,514
  7,963
  9,599
  11,420
  13,428
  15,620
  17,993
  20,544
  23,267
  26,159
  29,216
  32,435
  35,813
  39,349
  43,043
  46,895
  50,906
  55,080
  59,419
  63,929
Variable operating expenses, $m
 
  265
  410
  612
  889
  1,253
  1,723
  2,313
  3,036
  3,907
  4,935
  6,127
  7,491
  9,030
  10,743
  12,632
  14,695
  16,927
  19,326
  21,888
  24,608
  27,484
  30,512
  33,690
  37,017
  40,492
  44,115
  47,889
  51,815
  55,897
  60,140
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
  152
  265
  410
  612
  889
  1,253
  1,723
  2,313
  3,036
  3,907
  4,935
  6,127
  7,491
  9,030
  10,743
  12,632
  14,695
  16,927
  19,326
  21,888
  24,608
  27,484
  30,512
  33,690
  37,017
  40,492
  44,115
  47,889
  51,815
  55,897
  60,140
Operating income, $m
  24
  16
  25
  38
  56
  79
  108
  145
  191
  246
  311
  386
  472
  569
  677
  796
  926
  1,067
  1,218
  1,379
  1,550
  1,732
  1,922
  2,123
  2,332
  2,551
  2,780
  3,017
  3,265
  3,522
  3,789
EBITDA, $m
  34
  20
  31
  46
  67
  95
  130
  175
  230
  296
  373
  464
  567
  683
  813
  956
  1,112
  1,281
  1,462
  1,656
  1,862
  2,079
  2,308
  2,549
  2,801
  3,064
  3,338
  3,623
  3,920
  4,229
  4,550
Interest expense (income), $m
  29
  26
  45
  73
  112
  166
  237
  328
  442
  582
  751
  950
  1,181
  1,446
  1,744
  2,076
  2,442
  2,842
  3,274
  3,739
  4,236
  4,763
  5,320
  5,907
  6,523
  7,168
  7,842
  8,544
  9,275
  10,036
  10,827
Earnings before tax, $m
  -3
  -10
  -20
  -35
  -57
  -87
  -129
  -182
  -251
  -337
  -440
  -564
  -709
  -877
  -1,067
  -1,280
  -1,516
  -1,775
  -2,057
  -2,360
  -2,685
  -3,031
  -3,398
  -3,785
  -4,191
  -4,617
  -5,062
  -5,526
  -6,010
  -6,514
  -7,038
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
  -3
  -10
  -20
  -35
  -57
  -87
  -129
  -182
  -251
  -337
  -440
  -564
  -709
  -877
  -1,067
  -1,280
  -1,516
  -1,775
  -2,057
  -2,360
  -2,685
  -3,031
  -3,398
  -3,785
  -4,191
  -4,617
  -5,062
  -5,526
  -6,010
  -6,514
  -7,038

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  26
  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
  1,177
  1,841
  2,844
  4,253
  6,170
  8,705
  11,968
  16,065
  21,094
  27,143
  34,283
  42,572
  52,048
  62,736
  74,643
  87,767
  102,094
  117,604
  134,271
  152,069
  170,971
  190,952
  211,991
  234,072
  257,186
  281,329
  306,503
  332,720
  359,997
  388,359
  417,838
Adjusted assets (=assets-cash), $m
  1,151
  1,841
  2,844
  4,253
  6,170
  8,705
  11,968
  16,065
  21,094
  27,143
  34,283
  42,572
  52,048
  62,736
  74,643
  87,767
  102,094
  117,604
  134,271
  152,069
  170,971
  190,952
  211,991
  234,072
  257,186
  281,329
  306,503
  332,720
  359,997
  388,359
  417,838
Revenue / Adjusted assets
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
  0.153
Average production assets, $m
  21
  34
  52
  77
  112
  159
  218
  292
  384
  494
  624
  775
  948
  1,142
  1,359
  1,598
  1,859
  2,141
  2,445
  2,769
  3,113
  3,477
  3,860
  4,262
  4,683
  5,122
  5,581
  6,058
  6,554
  7,071
  7,608
Working capital, $m
  0
  -28
  -44
  -65
  -94
  -133
  -183
  -246
  -323
  -415
  -525
  -651
  -796
  -960
  -1,142
  -1,343
  -1,562
  -1,799
  -2,054
  -2,327
  -2,616
  -2,922
  -3,243
  -3,581
  -3,935
  -4,304
  -4,689
  -5,091
  -5,508
  -5,942
  -6,393
Total debt, $m
  741
  1,291
  2,090
  3,213
  4,742
  6,762
  9,362
  12,627
  16,636
  21,457
  27,148
  33,754
  41,307
  49,824
  59,315
  69,774
  81,193
  93,554
  106,838
  121,023
  136,088
  152,013
  168,781
  186,380
  204,801
  224,043
  244,107
  265,002
  286,742
  309,347
  332,841
Total liabilities, $m
  917
  1,467
  2,266
  3,389
  4,918
  6,938
  9,538
  12,803
  16,812
  21,633
  27,324
  33,930
  41,483
  50,000
  59,491
  69,950
  81,369
  93,730
  107,014
  121,199
  136,264
  152,189
  168,957
  186,556
  204,977
  224,219
  244,283
  265,178
  286,918
  309,523
  333,017
Total equity, $m
  260
  374
  577
  863
  1,253
  1,767
  2,429
  3,261
  4,282
  5,510
  6,959
  8,642
  10,566
  12,735
  15,153
  17,817
  20,725
  23,874
  27,257
  30,870
  34,707
  38,763
  43,034
  47,517
  52,209
  57,110
  62,220
  67,542
  73,079
  78,837
  84,821
Total liabilities and equity, $m
  1,177
  1,841
  2,843
  4,252
  6,171
  8,705
  11,967
  16,064
  21,094
  27,143
  34,283
  42,572
  52,049
  62,735
  74,644
  87,767
  102,094
  117,604
  134,271
  152,069
  170,971
  190,952
  211,991
  234,073
  257,186
  281,329
  306,503
  332,720
  359,997
  388,360
  417,838
Debt-to-equity ratio
  2.850
  3.460
  3.620
  3.720
  3.790
  3.830
  3.850
  3.870
  3.890
  3.890
  3.900
  3.910
  3.910
  3.910
  3.910
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
  3.920
Adjusted equity ratio
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3
  -10
  -20
  -35
  -57
  -87
  -129
  -182
  -251
  -337
  -440
  -564
  -709
  -877
  -1,067
  -1,280
  -1,516
  -1,775
  -2,057
  -2,360
  -2,685
  -3,031
  -3,398
  -3,785
  -4,191
  -4,617
  -5,062
  -5,526
  -6,010
  -6,514
  -7,038
Depreciation, amort., depletion, $m
  10
  4
  6
  8
  12
  16
  22
  30
  39
  50
  63
  78
  95
  114
  136
  160
  186
  214
  244
  277
  311
  348
  386
  426
  468
  512
  558
  606
  655
  707
  761
Funds from operations, $m
  183
  -6
  -14
  -27
  -45
  -71
  -106
  -153
  -212
  -287
  -378
  -487
  -615
  -763
  -931
  -1,120
  -1,330
  -1,561
  -1,812
  -2,083
  -2,374
  -2,684
  -3,012
  -3,358
  -3,723
  -4,105
  -4,504
  -4,921
  -5,355
  -5,807
  -6,277
Change in working capital, $m
  90
  -11
  -15
  -22
  -29
  -39
  -50
  -63
  -77
  -93
  -109
  -127
  -145
  -164
  -182
  -201
  -219
  -237
  -255
  -272
  -289
  -306
  -322
  -338
  -354
  -369
  -385
  -401
  -417
  -434
  -451
Cash from operations, $m
  93
  5
  1
  -5
  -16
  -32
  -56
  -90
  -135
  -194
  -268
  -360
  -470
  -599
  -749
  -919
  -1,111
  -1,324
  -1,557
  -1,811
  -2,085
  -2,378
  -2,690
  -3,021
  -3,369
  -3,735
  -4,119
  -4,519
  -4,938
  -5,373
  -5,826
Maintenance CAPEX, $m
  0
  -2
  -3
  -5
  -8
  -11
  -16
  -22
  -29
  -38
  -49
  -62
  -78
  -95
  -114
  -136
  -160
  -186
  -214
  -244
  -277
  -311
  -348
  -386
  -426
  -468
  -512
  -558
  -606
  -655
  -707
New CAPEX, $m
  -2
  -13
  -18
  -26
  -35
  -46
  -59
  -75
  -92
  -110
  -130
  -151
  -173
  -195
  -217
  -239
  -261
  -282
  -303
  -324
  -344
  -364
  -383
  -402
  -421
  -440
  -458
  -477
  -497
  -516
  -537
Cash from investing activities, $m
  55
  -15
  -21
  -31
  -43
  -57
  -75
  -97
  -121
  -148
  -179
  -213
  -251
  -290
  -331
  -375
  -421
  -468
  -517
  -568
  -621
  -675
  -731
  -788
  -847
  -908
  -970
  -1,035
  -1,103
  -1,171
  -1,244
Free cash flow, $m
  148
  -10
  -20
  -36
  -59
  -90
  -132
  -186
  -256
  -343
  -448
  -573
  -720
  -888
  -1,080
  -1,294
  -1,532
  -1,792
  -2,075
  -2,380
  -2,706
  -3,053
  -3,421
  -3,809
  -4,216
  -4,643
  -5,089
  -5,555
  -6,040
  -6,545
  -7,070
Issuance/(repayment) of debt, $m
  -152
  550
  799
  1,123
  1,528
  2,020
  2,600
  3,265
  4,008
  4,821
  5,691
  6,606
  7,553
  8,518
  9,490
  10,460
  11,419
  12,361
  13,284
  14,185
  15,065
  15,925
  16,768
  17,599
  18,422
  19,242
  20,064
  20,895
  21,740
  22,605
  23,495
Issuance/(repurchase) of shares, $m
  0
  149
  223
  321
  446
  602
  791
  1,014
  1,272
  1,564
  1,890
  2,247
  2,633
  3,046
  3,484
  3,944
  4,425
  4,924
  5,440
  5,973
  6,522
  7,088
  7,669
  8,267
  8,883
  9,518
  10,172
  10,848
  11,548
  12,272
  13,022
Cash from financing (excl. dividends), $m  
  -154
  699
  1,022
  1,444
  1,974
  2,622
  3,391
  4,279
  5,280
  6,385
  7,581
  8,853
  10,186
  11,564
  12,974
  14,404
  15,844
  17,285
  18,724
  20,158
  21,587
  23,013
  24,437
  25,866
  27,305
  28,760
  30,236
  31,743
  33,288
  34,877
  36,517
Total cash flow (excl. dividends), $m
  -6
  689
  1,002
  1,408
  1,916
  2,533
  3,259
  4,093
  5,024
  6,043
  7,133
  8,280
  9,466
  10,676
  11,894
  13,110
  14,312
  15,493
  16,649
  17,779
  18,881
  19,959
  21,016
  22,057
  23,089
  24,116
  25,147
  26,189
  27,248
  28,331
  29,447
Retained Cash Flow (-), $m
  2
  -149
  -223
  -321
  -446
  -602
  -791
  -1,014
  -1,272
  -1,564
  -1,890
  -2,247
  -2,633
  -3,046
  -3,484
  -3,944
  -4,425
  -4,924
  -5,440
  -5,973
  -6,522
  -7,088
  -7,669
  -8,267
  -8,883
  -9,518
  -10,172
  -10,848
  -11,548
  -12,272
  -13,022
Prev. year cash balance distribution, $m
 
  26
  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
 
  566
  779
  1,087
  1,470
  1,931
  2,469
  3,078
  3,752
  4,478
  5,243
  6,033
  6,833
  7,629
  8,410
  9,165
  9,887
  10,569
  11,209
  11,805
  12,359
  12,872
  13,347
  13,790
  14,206
  14,599
  14,975
  15,340
  15,700
  16,060
  16,425
Discount rate, %
 
  12.20
  12.81
  13.45
  14.12
  14.83
  15.57
  16.35
  17.17
  18.02
  18.93
  19.87
  20.87
  21.91
  23.00
  24.16
  25.36
  26.63
  27.96
  29.36
  30.83
  32.37
  33.99
  35.69
  37.47
  39.35
  41.31
  43.38
  45.55
  47.83
  50.22
PV of cash for distribution, $m
 
  504
  612
  744
  867
  967
  1,036
  1,067
  1,056
  1,008
  926
  822
  703
  581
  463
  357
  266
  191
  132
  89
  57
  36
  21
  12
  7
  4
  2
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  55.4
  31.6
  18.6
  11.2
  7.0
  4.5
  2.9
  2.0
  1.3
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  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

Stonegate Mortgage Corporation, a non-bank mortgage company, focuses on originating, financing, and serving residential mortgage loans in the United States. The company operates through three segments: Originations, Servicing, and Financing. The Originations segment originates and sells residential mortgage loans through correspondent, wholesale, and retail channels. Its products include government mortgage loans, prime conforming mortgage loans, prime non-conforming mortgage loans, and non-agency loans. The Servicing segment performs loan administration, collection, and default activities, including the collection and remittance of loan payments, responding to customer inquiries, accounting for principal and interest, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors, modifying loans, and supervising foreclosures and its property dispositions. The Financing segment underwrites the warehouse lines of credit for correspondent originators and customers who do not sell loans to its Originations segment. The company was founded in 2005 and is headquartered in Indianapolis, Indiana.

FINANCIAL RATIOS  of  Stonegate Mortgage (SGM)

Valuation Ratios
P/E Ratio -68.8
Price to Sales 1.2
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 2.2
Price to Free Cash Flow 2.3
Growth Rates
Sales Growth Rate -3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -87.5%
Cap. Spend. - 3 Yr. Gr. Rate -27.5%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 285%
Total Debt to Equity 285%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. 0.4%
Return On Total Capital -0.3%
Ret/ On T. Cap. - 3 Yr. Avg. -1.6%
Return On Equity -1.1%
Return On Equity - 3 Yr. Avg. -6.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 20.5%
EBITDA Margin - 3 Yr. Avg. 9%
Operating Margin 13.6%
Oper. Margin - 3 Yr. Avg. 3.8%
Pre-Tax Margin -1.7%
Pre-Tax Margin - 3 Yr. Avg. -12.6%
Net Profit Margin -1.7%
Net Profit Margin - 3 Yr. Avg. -11.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 20.5%
Payout Ratio 0%

SGM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SGM stock intrinsic value calculation we used $176 million for the last fiscal year's total revenue generated by Stonegate Mortgage. The default revenue input number comes from 2016 income statement of Stonegate Mortgage. 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 SGM stock valuation model: a) initial revenue growth rate of 60% 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 12.2%, whose default value for SGM is calculated based on our internal credit rating of Stonegate Mortgage, 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 Stonegate Mortgage.
    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 SGM stock the variable cost ratio is equal to 94.3%.

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 SGM 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 Stonegate Mortgage.

Corporate tax rate of 27% is the nominal tax rate for Stonegate Mortgage. 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 SGM 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 SGM are equal to 11.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Stonegate Mortgage 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 SGM is equal to -10%. 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 - $260 million for Stonegate Mortgage - 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 25.789 million for Stonegate Mortgage 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 Stonegate Mortgage at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
PFSI PennyMac Finan 17.00 136.77  str.buy
IMH IMPAC Mortgage 13.62 30.30  str.buy
PHH PHH 14.11 5.15  str.sell
AI Arlington Asse 12.94 4.07  str.sell
EFC Ellington Fina 16.02 4.93  str.sell
ATAX America First 6.15 20.06  str.buy
Stock chart of SGM Financial statements of SGM
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.