Intrinsic value of Stanley Black&Decker - SWK

Previous Close

$166.90

  Intrinsic Value

$295.19

stock screener

  Rating & Target

str. buy

+77%

Previous close

$166.90

 
Intrinsic value

$295.19

 
Up/down potential

+77%

 
Rating

str. buy

We calculate the intrinsic value of SWK 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 25.6

 

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, %
  2.10
  10.20
  9.68
  9.21
  8.79
  8.41
  8.07
  7.76
  7.49
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
  5.96
  5.87
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.34
  5.30
  5.27
  5.24
Revenue, $m
  11,407
  12,571
  13,787
  15,057
  16,381
  17,759
  19,192
  20,682
  22,231
  23,840
  25,512
  27,250
  29,058
  30,937
  32,893
  34,929
  37,049
  39,259
  41,562
  43,965
  46,472
  49,089
  51,823
  54,679
  57,665
  60,788
  64,054
  67,472
  71,050
  74,796
  78,719
Variable operating expenses, $m
 
  8,165
  8,891
  9,648
  10,438
  11,259
  12,114
  13,003
  13,926
  14,886
  15,883
  16,250
  17,328
  18,448
  19,615
  20,829
  22,093
  23,411
  24,784
  26,217
  27,712
  29,273
  30,903
  32,606
  34,387
  36,249
  38,197
  40,235
  42,368
  44,602
  46,941
Fixed operating expenses, $m
 
  2,663
  2,730
  2,798
  2,868
  2,939
  3,013
  3,088
  3,165
  3,245
  3,326
  3,409
  3,494
  3,581
  3,671
  3,763
  3,857
  3,953
  4,052
  4,153
  4,257
  4,364
  4,473
  4,584
  4,699
  4,817
  4,937
  5,060
  5,187
  5,317
  5,449
Total operating expenses, $m
  10,010
  10,828
  11,621
  12,446
  13,306
  14,198
  15,127
  16,091
  17,091
  18,131
  19,209
  19,659
  20,822
  22,029
  23,286
  24,592
  25,950
  27,364
  28,836
  30,370
  31,969
  33,637
  35,376
  37,190
  39,086
  41,066
  43,134
  45,295
  47,555
  49,919
  52,390
Operating income, $m
  1,397
  1,742
  2,167
  2,611
  3,076
  3,560
  4,065
  4,591
  5,139
  5,710
  6,304
  7,592
  8,236
  8,907
  9,607
  10,338
  11,099
  11,895
  12,726
  13,595
  14,503
  15,453
  16,447
  17,489
  18,579
  19,723
  20,921
  22,177
  23,495
  24,877
  26,328
EBITDA, $m
  1,805
  2,553
  2,991
  3,450
  3,929
  4,429
  4,950
  5,493
  6,058
  6,647
  7,259
  7,897
  8,562
  9,255
  9,976
  10,729
  11,515
  12,335
  13,192
  14,088
  15,024
  16,004
  17,029
  18,102
  19,226
  20,405
  21,639
  22,934
  24,292
  25,716
  27,211
Interest expense (income), $m
  177
  175
  218
  264
  311
  361
  412
  465
  521
  579
  639
  701
  766
  833
  903
  976
  1,052
  1,131
  1,214
  1,300
  1,389
  1,483
  1,580
  1,682
  1,789
  1,900
  2,017
  2,138
  2,266
  2,399
  2,539
Earnings before tax, $m
  1,226
  1,567
  1,948
  2,347
  2,764
  3,200
  3,653
  4,126
  4,618
  5,131
  5,665
  6,891
  7,470
  8,074
  8,704
  9,361
  10,047
  10,764
  11,512
  12,295
  13,114
  13,970
  14,867
  15,806
  16,791
  17,822
  18,904
  20,039
  21,229
  22,478
  23,789
Tax expense, $m
  261
  423
  526
  634
  746
  864
  986
  1,114
  1,247
  1,385
  1,530
  1,860
  2,017
  2,180
  2,350
  2,528
  2,713
  2,906
  3,108
  3,320
  3,541
  3,772
  4,014
  4,268
  4,533
  4,812
  5,104
  5,410
  5,732
  6,069
  6,423
Net income, $m
  965
  1,144
  1,422
  1,714
  2,018
  2,336
  2,667
  3,012
  3,371
  3,746
  4,135
  5,030
  5,453
  5,894
  6,354
  6,834
  7,334
  7,857
  8,404
  8,975
  9,573
  10,198
  10,853
  11,539
  12,257
  13,010
  13,800
  14,628
  15,497
  16,409
  17,366

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,132
  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
  15,635
  15,973
  17,519
  19,133
  20,815
  22,565
  24,387
  26,280
  28,248
  30,292
  32,417
  34,626
  36,922
  39,310
  41,795
  44,382
  47,077
  49,884
  52,811
  55,864
  59,049
  62,375
  65,849
  69,478
  73,272
  77,240
  81,390
  85,733
  90,279
  95,039
  100,024
Adjusted assets (=assets-cash), $m
  14,503
  15,973
  17,519
  19,133
  20,815
  22,565
  24,387
  26,280
  28,248
  30,292
  32,417
  34,626
  36,922
  39,310
  41,795
  44,382
  47,077
  49,884
  52,811
  55,864
  59,049
  62,375
  65,849
  69,478
  73,272
  77,240
  81,390
  85,733
  90,279
  95,039
  100,024
Revenue / Adjusted assets
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
Average production assets, $m
  3,147
  3,469
  3,805
  4,156
  4,521
  4,901
  5,297
  5,708
  6,136
  6,580
  7,041
  7,521
  8,020
  8,539
  9,078
  9,640
  10,226
  10,835
  11,471
  12,134
  12,826
  13,549
  14,303
  15,092
  15,916
  16,777
  17,679
  18,622
  19,610
  20,644
  21,726
Working capital, $m
  1,981
  943
  1,034
  1,129
  1,229
  1,332
  1,439
  1,551
  1,667
  1,788
  1,913
  2,044
  2,179
  2,320
  2,467
  2,620
  2,779
  2,944
  3,117
  3,297
  3,485
  3,682
  3,887
  4,101
  4,325
  4,559
  4,804
  5,060
  5,329
  5,610
  5,904
Total debt, $m
  3,827
  4,750
  5,736
  6,766
  7,839
  8,956
  10,118
  11,326
  12,581
  13,885
  15,241
  16,650
  18,115
  19,639
  21,224
  22,875
  24,594
  26,385
  28,252
  30,200
  32,232
  34,354
  36,570
  38,886
  41,307
  43,838
  46,486
  49,257
  52,157
  55,194
  58,374
Total liabilities, $m
  9,268
  10,191
  11,177
  12,207
  13,280
  14,397
  15,559
  16,767
  18,022
  19,326
  20,682
  22,091
  23,556
  25,080
  26,665
  28,316
  30,035
  31,826
  33,693
  35,641
  37,673
  39,795
  42,011
  44,327
  46,748
  49,279
  51,927
  54,698
  57,598
  60,635
  63,815
Total equity, $m
  6,367
  5,782
  6,342
  6,926
  7,535
  8,169
  8,828
  9,513
  10,226
  10,966
  11,735
  12,534
  13,366
  14,230
  15,130
  16,066
  17,042
  18,058
  19,118
  20,223
  21,376
  22,580
  23,837
  25,151
  26,525
  27,961
  29,463
  31,035
  32,681
  34,404
  36,209
Total liabilities and equity, $m
  15,635
  15,973
  17,519
  19,133
  20,815
  22,566
  24,387
  26,280
  28,248
  30,292
  32,417
  34,625
  36,922
  39,310
  41,795
  44,382
  47,077
  49,884
  52,811
  55,864
  59,049
  62,375
  65,848
  69,478
  73,273
  77,240
  81,390
  85,733
  90,279
  95,039
  100,024
Debt-to-equity ratio
  0.601
  0.820
  0.900
  0.980
  1.040
  1.100
  1.150
  1.190
  1.230
  1.270
  1.300
  1.330
  1.360
  1.380
  1.400
  1.420
  1.440
  1.460
  1.480
  1.490
  1.510
  1.520
  1.530
  1.550
  1.560
  1.570
  1.580
  1.590
  1.600
  1.600
  1.610
Adjusted equity ratio
  0.361
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  965
  1,144
  1,422
  1,714
  2,018
  2,336
  2,667
  3,012
  3,371
  3,746
  4,135
  5,030
  5,453
  5,894
  6,354
  6,834
  7,334
  7,857
  8,404
  8,975
  9,573
  10,198
  10,853
  11,539
  12,257
  13,010
  13,800
  14,628
  15,497
  16,409
  17,366
Depreciation, amort., depletion, $m
  408
  810
  824
  838
  853
  869
  885
  901
  919
  937
  956
  306
  326
  347
  369
  392
  416
  440
  466
  493
  521
  551
  581
  613
  647
  682
  719
  757
  797
  839
  883
Funds from operations, $m
  1,479
  1,954
  2,246
  2,552
  2,871
  3,204
  3,552
  3,913
  4,290
  4,683
  5,091
  5,336
  5,779
  6,241
  6,723
  7,226
  7,750
  8,298
  8,870
  9,469
  10,094
  10,749
  11,434
  12,152
  12,904
  13,692
  14,519
  15,385
  16,294
  17,248
  18,249
Change in working capital, $m
  -6
  87
  91
  95
  99
  103
  107
  112
  116
  121
  125
  130
  136
  141
  147
  153
  159
  166
  173
  180
  188
  196
  205
  214
  224
  234
  245
  256
  268
  281
  294
Cash from operations, $m
  1,485
  1,867
  2,155
  2,457
  2,772
  3,101
  3,444
  3,802
  4,174
  4,562
  4,966
  5,206
  5,644
  6,100
  6,576
  7,073
  7,591
  8,132
  8,698
  9,288
  9,906
  10,553
  11,229
  11,938
  12,680
  13,458
  14,274
  15,129
  16,026
  16,967
  17,955
Maintenance CAPEX, $m
  0
  -128
  -141
  -155
  -169
  -184
  -199
  -215
  -232
  -249
  -267
  -286
  -306
  -326
  -347
  -369
  -392
  -416
  -440
  -466
  -493
  -521
  -551
  -581
  -613
  -647
  -682
  -719
  -757
  -797
  -839
New CAPEX, $m
  -347
  -323
  -336
  -351
  -365
  -380
  -396
  -411
  -427
  -444
  -462
  -480
  -499
  -519
  -540
  -562
  -585
  -610
  -636
  -663
  -692
  -722
  -755
  -788
  -824
  -862
  -902
  -943
  -987
  -1,034
  -1,083
Cash from investing activities, $m
  -284
  -451
  -477
  -506
  -534
  -564
  -595
  -626
  -659
  -693
  -729
  -766
  -805
  -845
  -887
  -931
  -977
  -1,026
  -1,076
  -1,129
  -1,185
  -1,243
  -1,306
  -1,369
  -1,437
  -1,509
  -1,584
  -1,662
  -1,744
  -1,831
  -1,922
Free cash flow, $m
  1,201
  1,416
  1,678
  1,951
  2,238
  2,537
  2,849
  3,175
  3,515
  3,868
  4,237
  4,440
  4,839
  5,255
  5,689
  6,142
  6,614
  7,107
  7,621
  8,159
  8,721
  9,309
  9,924
  10,568
  11,243
  11,949
  12,690
  13,467
  14,281
  15,136
  16,033
Issuance/(repayment) of debt, $m
  2
  935
  986
  1,030
  1,073
  1,117
  1,162
  1,208
  1,255
  1,305
  1,356
  1,409
  1,465
  1,524
  1,585
  1,650
  1,719
  1,791
  1,867
  1,948
  2,032
  2,122
  2,216
  2,316
  2,421
  2,531
  2,648
  2,771
  2,900
  3,037
  3,180
Issuance/(repurchase) of shares, $m
  -103
  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  
  -102
  935
  986
  1,030
  1,073
  1,117
  1,162
  1,208
  1,255
  1,305
  1,356
  1,409
  1,465
  1,524
  1,585
  1,650
  1,719
  1,791
  1,867
  1,948
  2,032
  2,122
  2,216
  2,316
  2,421
  2,531
  2,648
  2,771
  2,900
  3,037
  3,180
Total cash flow (excl. dividends), $m
  997
  2,351
  2,665
  2,981
  3,311
  3,654
  4,011
  4,383
  4,770
  5,173
  5,592
  5,849
  6,304
  6,779
  7,275
  7,792
  8,333
  8,898
  9,489
  10,107
  10,753
  11,431
  12,140
  12,884
  13,663
  14,481
  15,338
  16,238
  17,182
  18,173
  19,213
Retained Cash Flow (-), $m
  -555
  -535
  -560
  -584
  -609
  -634
  -659
  -685
  -712
  -740
  -769
  -800
  -831
  -865
  -900
  -936
  -975
  -1,016
  -1,060
  -1,105
  -1,153
  -1,204
  -1,257
  -1,314
  -1,373
  -1,436
  -1,502
  -1,572
  -1,646
  -1,723
  -1,804
Prev. year cash balance distribution, $m
 
  1,120
  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
 
  2,935
  2,105
  2,397
  2,702
  3,020
  3,352
  3,698
  4,058
  4,433
  4,823
  5,049
  5,473
  5,915
  6,375
  6,856
  7,358
  7,882
  8,429
  9,002
  9,600
  10,227
  10,883
  11,570
  12,290
  13,044
  13,836
  14,666
  15,536
  16,450
  17,409
Discount rate, %
 
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
 
  2,806
  1,915
  2,066
  2,196
  2,301
  2,380
  2,433
  2,457
  2,453
  2,421
  2,281
  2,206
  2,108
  1,989
  1,855
  1,707
  1,549
  1,387
  1,224
  1,064
  911
  767
  634
  515
  411
  321
  245
  184
  134
  96
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

Stanley Black & Decker, Inc. is a global provider of hand tools, power tools and related accessories, mechanical access solutions, such as automatic doors and commercial locking systems, electronic security and monitoring systems, healthcare solutions, engineered fastening systems, and products and services for various industrial applications. The Company's segments include Tools & Storage, Security and Industrial. Its Tools & Storage segment consists of the Power Tools and Hand Tools, Accessories and Storage businesses. Its Security segment consists of the Convergent Security Solutions and Mechanical Access Solutions businesses. Its Industrial segment consists of the Engineered Fastening and Infrastructure businesses. It offers brands, such as SIDCHROME, AeroScout, DEWALT, Newell Tools and Craftsman, Irwin, Lenox, Craftsman, BLACK+DECKER, SONITROL, Warren, GRIPCO, Porter-Cable, BOSTITCH and WanderGuard.

FINANCIAL RATIOS  of  Stanley Black&Decker (SWK)

Valuation Ratios
P/E Ratio 26.4
Price to Sales 2.2
Price to Book 4
Price to Tangible Book
Price to Cash Flow 17.1
Price to Free Cash Flow 22.4
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11.6%
Cap. Spend. - 3 Yr. Gr. Rate 0.4%
Financial Strength
Quick Ratio 94
Current Ratio 0.2
LT Debt to Equity 59.9%
Total Debt to Equity 60.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 7.2%
Ret/ On Assets - 3 Yr. Avg. 6.5%
Return On Total Capital 9.7%
Ret/ On T. Cap. - 3 Yr. Avg. 8.6%
Return On Equity 15.8%
Return On Equity - 3 Yr. Avg. 13.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 37.4%
Gross Margin - 3 Yr. Avg. 36.7%
EBITDA Margin 15.9%
EBITDA Margin - 3 Yr. Avg. 15.5%
Operating Margin 12.2%
Oper. Margin - 3 Yr. Avg. 11.7%
Pre-Tax Margin 10.7%
Pre-Tax Margin - 3 Yr. Avg. 10.2%
Net Profit Margin 8.5%
Net Profit Margin - 3 Yr. Avg. 7.7%
Effective Tax Rate 21.3%
Eff/ Tax Rate - 3 Yr. Avg. 21.3%
Payout Ratio 34.3%

SWK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SWK stock intrinsic value calculation we used $11407 million for the last fiscal year's total revenue generated by Stanley Black&Decker. The default revenue input number comes from 2016 income statement of Stanley Black&Decker. 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 SWK stock valuation model: a) initial revenue growth rate of 10.2% 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 4.6%, whose default value for SWK is calculated based on our internal credit rating of Stanley Black&Decker, 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 Stanley Black&Decker.
    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 SWK stock the variable cost ratio is equal to 65.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2598 million in the base year in the intrinsic value calculation for SWK 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 4.6% for Stanley Black&Decker.

Corporate tax rate of 27% is the nominal tax rate for Stanley Black&Decker. 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 SWK 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 SWK are equal to 27.6%.

Life of production assets of 24.6 years is the average useful life of capital assets used in Stanley Black&Decker 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 SWK is equal to 7.5%. 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 - $6367 million for Stanley Black&Decker - 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 153.135 million for Stanley Black&Decker 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 Stanley Black&Decker at the current share price and the inputted number of shares is $25.6 billion.

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COMPANY NEWS

▶ This $10 stuffed animal was a top Black Friday seller   [Nov-25-17 09:08AM  MarketWatch]
▶ Whats Stanley Black & Deckers Valuation?   [Nov-20-17 07:31AM  Market Realist]
▶ What Analysts Recommend for Stanley Black & Decker   [Nov-17-17 10:32AM  Market Realist]
▶ Stanley Black & Decker to Pay 4Q17 Dividend   [07:33AM  Market Realist]
▶ Stanley Black & Decker: Cramer's Top Takeaways   [Oct-26-17 06:40PM  TheStreet.com]
▶ Caterpillar and 3M jump while Whirlpool tumbles   [Oct-24-17 04:38PM  Associated Press]
▶ Stanley Black & Decker tops Street 3Q forecasts   [06:15AM  Associated Press]
▶ Analysts Views on Stanley Black & Decker ahead of 3Q17   [Oct-19-17 12:36PM  Market Realist]
▶ 3 Stocks to Buy and Hold for 100 Years   [Oct-18-17 09:00PM  Motley Fool]
▶ SWK Has Strong Debt-to-Equity Ratio amid Rising Debt   [Oct-06-17 09:09AM  Market Realist]
▶ For Those Who Make: Adding Context To Your Company   [Oct-02-17 04:49PM  Fortune]
▶ 3 Stocks to Hold for the Next 10 Years   [Sep-23-17 08:45PM  Motley Fool]
▶ Are These 3 High-Flying Stocks Still a Good Value?   [Sep-21-17 10:31AM  Motley Fool]
▶ 5 Companies Hit 52-Week Highs   [Sep-19-17 12:23PM  GuruFocus.com]
▶ 5 Companies Reach 52-Week Highs   [Sep-12-17 01:40PM  GuruFocus.com]
▶ Stanley Black & Decker Builds a Rally   [Sep-11-17 02:46PM  TheStreet.com]
▶ Home improvement outlook favorable: Bank of America   [Sep-05-17 12:25PM  CNBC Videos]
▶ Sears Holdings Corp (SHLD) Stock Head-Faked the Bulls   [Aug-25-17 09:11AM  InvestorPlace]
▶ Whats Wall Streets View on Stanley Black & Decker?   [Aug-23-17 03:35PM  Market Realist]
▶ Dividend Yield of Stanley Black & Decker   [12:42PM  Market Realist]
▶ 10 Stakes Pioneer Investments Keeps Buying   [Aug-17-17 03:36PM  GuruFocus.com]
Financial statements of SWK
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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