Intrinsic value of Sigmatron International - SGMA

Previous Close

$9.17

  Intrinsic Value

$116.51

stock screener

  Rating & Target

str. buy

+999%

Previous close

$9.17

 
Intrinsic value

$116.51

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SGMA 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -0.79
  10.60
  10.04
  9.54
  9.08
  8.67
  8.31
  7.98
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.33
  5.29
  5.26
Revenue, $m
  252
  279
  307
  336
  366
  398
  431
  466
  501
  539
  577
  617
  659
  702
  748
  795
  843
  894
  947
  1,003
  1,061
  1,121
  1,184
  1,249
  1,318
  1,390
  1,465
  1,543
  1,626
  1,712
  1,802
Variable operating expenses, $m
 
  139
  153
  168
  183
  199
  215
  233
  250
  269
  288
  308
  329
  350
  373
  396
  421
  446
  473
  500
  529
  559
  590
  623
  657
  693
  731
  770
  811
  854
  899
Fixed operating expenses, $m
 
  129
  132
  136
  139
  143
  146
  150
  154
  157
  161
  165
  169
  174
  178
  182
  187
  192
  197
  201
  206
  212
  217
  222
  228
  234
  239
  245
  252
  258
  264
Total operating expenses, $m
  249
  268
  285
  304
  322
  342
  361
  383
  404
  426
  449
  473
  498
  524
  551
  578
  608
  638
  670
  701
  735
  771
  807
  845
  885
  927
  970
  1,015
  1,063
  1,112
  1,163
Operating income, $m
  3
  10
  21
  32
  44
  57
  70
  83
  98
  112
  128
  144
  161
  178
  197
  216
  236
  257
  278
  301
  325
  350
  376
  404
  433
  463
  495
  528
  563
  600
  639
EBITDA, $m
  8
  12
  22
  34
  46
  58
  72
  85
  100
  115
  130
  146
  163
  181
  199
  219
  239
  260
  282
  305
  329
  354
  381
  408
  437
  468
  500
  534
  569
  606
  645
Interest expense (income), $m
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
Earnings before tax, $m
  3
  9
  20
  31
  42
  54
  67
  80
  94
  108
  123
  139
  155
  172
  190
  209
  228
  248
  269
  292
  315
  339
  365
  392
  420
  449
  480
  512
  547
  582
  620
Tax expense, $m
  2
  2
  5
  8
  11
  15
  18
  22
  25
  29
  33
  38
  42
  47
  51
  56
  62
  67
  73
  79
  85
  92
  98
  106
  113
  121
  130
  138
  148
  157
  167
Net income, $m
  1
  7
  14
  22
  31
  40
  49
  58
  69
  79
  90
  102
  113
  126
  139
  152
  166
  181
  197
  213
  230
  248
  266
  286
  306
  328
  350
  374
  399
  425
  453

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
  151
  164
  180
  197
  215
  234
  253
  273
  294
  316
  339
  363
  387
  413
  439
  467
  495
  525
  556
  589
  623
  658
  695
  734
  774
  816
  860
  906
  955
  1,005
  1,058
Adjusted assets (=assets-cash), $m
  148
  164
  180
  197
  215
  234
  253
  273
  294
  316
  339
  363
  387
  413
  439
  467
  495
  525
  556
  589
  623
  658
  695
  734
  774
  816
  860
  906
  955
  1,005
  1,058
Revenue / Adjusted assets
  1.703
  1.701
  1.706
  1.706
  1.702
  1.701
  1.704
  1.707
  1.704
  1.706
  1.702
  1.700
  1.703
  1.700
  1.704
  1.702
  1.703
  1.703
  1.703
  1.703
  1.703
  1.704
  1.704
  1.702
  1.703
  1.703
  1.703
  1.703
  1.703
  1.703
  1.703
Average production assets, $m
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  32
Working capital, $m
  53
  57
  63
  69
  75
  82
  89
  96
  103
  111
  119
  127
  136
  145
  154
  164
  174
  184
  195
  207
  218
  231
  244
  257
  272
  286
  302
  318
  335
  353
  371
Total debt, $m
  33
  40
  50
  60
  71
  82
  93
  105
  117
  130
  143
  157
  172
  187
  202
  218
  235
  253
  271
  290
  310
  331
  353
  375
  399
  424
  450
  477
  505
  535
  566
Total liabilities, $m
  89
  96
  106
  116
  127
  138
  149
  161
  173
  186
  199
  213
  228
  243
  258
  274
  291
  309
  327
  346
  366
  387
  409
  431
  455
  480
  506
  533
  561
  591
  622
Total equity, $m
  62
  67
  74
  81
  89
  96
  104
  113
  121
  130
  140
  149
  159
  170
  181
  192
  204
  216
  229
  243
  257
  271
  286
  302
  319
  336
  354
  373
  393
  414
  436
Total liabilities and equity, $m
  151
  163
  180
  197
  216
  234
  253
  274
  294
  316
  339
  362
  387
  413
  439
  466
  495
  525
  556
  589
  623
  658
  695
  733
  774
  816
  860
  906
  954
  1,005
  1,058
Debt-to-equity ratio
  0.532
  0.600
  0.670
  0.740
  0.800
  0.850
  0.890
  0.930
  0.970
  1.000
  1.030
  1.050
  1.080
  1.100
  1.120
  1.140
  1.150
  1.170
  1.180
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.270
  1.280
  1.280
  1.290
  1.300
Adjusted equity ratio
  0.399
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  7
  14
  22
  31
  40
  49
  58
  69
  79
  90
  102
  113
  126
  139
  152
  166
  181
  197
  213
  230
  248
  266
  286
  306
  328
  350
  374
  399
  425
  453
Depreciation, amort., depletion, $m
  5
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
Funds from operations, $m
  -7
  8
  16
  24
  32
  41
  51
  60
  71
  81
  92
  104
  116
  128
  141
  155
  170
  184
  200
  217
  234
  252
  271
  290
  311
  333
  356
  380
  405
  431
  459
Change in working capital, $m
  -7
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  18
  19
Cash from operations, $m
  0
  2
  10
  18
  26
  35
  44
  53
  63
  74
  84
  95
  107
  119
  132
  146
  159
  174
  189
  205
  222
  239
  258
  277
  297
  318
  340
  363
  388
  414
  441
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
New CAPEX, $m
  -4
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
Cash from investing activities, $m
  -4
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -8
  -8
Free cash flow, $m
  -4
  1
  8
  16
  24
  33
  42
  51
  61
  71
  82
  93
  104
  116
  129
  142
  156
  170
  185
  201
  217
  234
  252
  271
  291
  312
  334
  357
  381
  406
  433
Issuance/(repayment) of debt, $m
  2
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
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  
  3
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
Total cash flow (excl. dividends), $m
  -1
  10
  18
  26
  35
  44
  53
  63
  73
  84
  95
  107
  119
  131
  144
  158
  173
  188
  203
  220
  237
  255
  274
  294
  315
  337
  360
  384
  409
  436
  464
Retained Cash Flow (-), $m
  -2
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
Prev. year cash balance distribution, $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
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
  11
  19
  28
  36
  45
  55
  65
  75
  86
  97
  109
  121
  134
  147
  161
  175
  191
  206
  223
  241
  259
  278
  298
  319
  342
  365
  389
  415
  442
Discount rate, %
 
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
 
  5
  10
  16
  21
  25
  28
  31
  32
  33
  33
  33
  31
  29
  27
  25
  22
  19
  16
  14
  11
  9
  7
  5
  4
  3
  2
  1
  1
  1
  0
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

SigmaTron International, Inc. is a provider of electronic manufacturing service (EMS), which includes printed circuit board assemblies, and assembled (box-build) electronic products. The Company also provides services to its customers, including automatic and manual assembly and testing of products; material sourcing and procurement; manufacturing and test engineering support, and assistance in obtaining product approval from governmental and other regulatory bodies. The Company provides manufacturing and assembly services ranging from the assembly of individual components to the assembly and testing of box-build electronic products. Its technologies and services include manufacturing and testing services, design services, supply chain management, and warehousing and distribution. The Company's products are sold in various industries, including appliance, consumer electronics, gaming, fitness, industrial electronics, medical/life sciences, semiconductor and telecommunications.


Warning: Division by zero in /home3/webhub/public_html/x-fin.com/stocks/a-inc/ratios.php on line 8

FINANCIAL RATIOS  of  Sigmatron International (SGMA)

Valuation Ratios
P/E Ratio 38.5
Price to Sales 0.2
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow -9.6
Growth Rates
Sales Growth Rate -0.8%
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 2
Current Ratio 0
LT Debt to Equity 50%
Total Debt to Equity 53.2%
Interest Coverage 4
Management Effectiveness
Return On Assets 0.9%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital 1.1%
Ret/ On T. Cap. - 3 Yr. Avg. 1.5%
Return On Equity 1.6%
Return On Equity - 3 Yr. Avg. 2.3%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 9.5%
Gross Margin - 3 Yr. Avg. 9.8%
EBITDA Margin 3.6%
EBITDA Margin - 3 Yr. Avg. 3.5%
Operating Margin 1.2%
Oper. Margin - 3 Yr. Avg. 1.2%
Pre-Tax Margin 1.2%
Pre-Tax Margin - 3 Yr. Avg. 1.1%
Net Profit Margin 0.4%
Net Profit Margin - 3 Yr. Avg. 0.5%
Effective Tax Rate 66.7%
Eff/ Tax Rate - 3 Yr. Avg. 50%
Payout Ratio 0%

SGMA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SGMA stock intrinsic value calculation we used $252 million for the last fiscal year's total revenue generated by Sigmatron International. The default revenue input number comes from 2017 income statement of Sigmatron International. 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 SGMA stock valuation model: a) initial revenue growth rate of 10.6% 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 6.4%, whose default value for SGMA is calculated based on our internal credit rating of Sigmatron International, 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 Sigmatron International.
    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 SGMA stock the variable cost ratio is equal to 50%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $126 million in the base year in the intrinsic value calculation for SGMA 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 Sigmatron International.

Corporate tax rate of 27% is the nominal tax rate for Sigmatron International. 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 SGMA 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 SGMA are equal to 1.8%.

Life of production assets of 1.5 years is the average useful life of capital assets used in Sigmatron International 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 SGMA is equal to 20.6%. 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 - $62 million for Sigmatron International - 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 4.244 million for Sigmatron International 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 Sigmatron International at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
PLXS Plexus 59.97 24.93  str.sell
JBL Jabil 26.62 70.56  str.buy
SANM Sanmina 27.10 35.68  hold
IEC IEC Electronic 3.93 0.34  str.sell
BHE Benchmark Elec 29.95 26.64  hold
TTMI TTM Technologi 17.20 39.61  str.buy
NSYS Nortech System 3.66 1.69  str.sell
SPA Sparton 23.16 1.75  str.sell
FLEX Flex Ltd 19.44 29.31  str.buy

COMPANY NEWS

▶ 10-K for SigmaTron International, Inc.   [Jul-29  08:09PM  at Company Spotlight]
▶ 10-Q for SigmaTron International, Inc.   [May-04  08:12PM  at Company Spotlight]
▶ 10-Q for SigmaTron International, Inc.   [Dec-14  07:07PM  at Company Spotlight]
▶ SigmaTron - Small, Diverse And Ready For Global Growth   [Jun-03  04:23AM  at Seeking Alpha]
▶ Winning 14.77% on the Perfect Bull Stock   [Mar-17  10:30AM  at TheStreet]
Financial statements of SGMA
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

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.