Intrinsic value of Westlake Chemical Partners - WLKP

Previous Close

$22.90

  Intrinsic Value

$645.00

stock screener

  Rating & Target

str. buy

+999%

Previous close

$22.90

 
Intrinsic value

$645.00

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of WLKP 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, %
  -1.99
  37.40
  34.16
  31.24
  28.62
  26.26
  24.13
  22.22
  20.50
  18.95
  17.55
  16.30
  15.17
  14.15
  13.24
  12.41
  11.67
  11.00
  10.40
  9.86
  9.38
  8.94
  8.55
  8.19
  7.87
  7.58
  7.33
  7.09
  6.88
  6.70
  6.53
Revenue, $m
  987
  1,356
  1,819
  2,388
  3,071
  3,878
  4,813
  5,883
  7,089
  8,432
  9,912
  11,527
  13,276
  15,154
  17,160
  19,290
  21,541
  23,911
  26,399
  29,003
  31,722
  34,558
  37,511
  40,583
  43,778
  47,098
  50,549
  54,134
  57,861
  61,735
  65,764
Variable operating expenses, $m
 
  872
  1,169
  1,535
  1,974
  2,492
  3,093
  3,780
  4,554
  5,417
  6,368
  7,405
  8,528
  9,735
  11,023
  12,392
  13,838
  15,360
  16,959
  18,631
  20,378
  22,200
  24,097
  26,070
  28,123
  30,256
  32,472
  34,775
  37,169
  39,658
  42,246
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
  620
  872
  1,169
  1,535
  1,974
  2,492
  3,093
  3,780
  4,554
  5,417
  6,368
  7,405
  8,528
  9,735
  11,023
  12,392
  13,838
  15,360
  16,959
  18,631
  20,378
  22,200
  24,097
  26,070
  28,123
  30,256
  32,472
  34,775
  37,169
  39,658
  42,246
Operating income, $m
  366
  484
  650
  853
  1,098
  1,386
  1,721
  2,103
  2,534
  3,015
  3,544
  4,122
  4,747
  5,419
  6,137
  6,898
  7,703
  8,551
  9,440
  10,372
  11,344
  12,358
  13,414
  14,513
  15,655
  16,843
  18,077
  19,359
  20,692
  22,077
  23,518
EBITDA, $m
  464
  619
  830
  1,090
  1,402
  1,770
  2,197
  2,685
  3,235
  3,848
  4,524
  5,261
  6,059
  6,916
  7,832
  8,804
  9,831
  10,913
  12,048
  13,237
  14,478
  15,772
  17,120
  18,522
  19,980
  21,495
  23,070
  24,706
  26,407
  28,175
  30,014
Interest expense (income), $m
  0
  21
  33
  55
  82
  114
  151
  195
  245
  302
  365
  434
  510
  591
  679
  773
  873
  978
  1,089
  1,206
  1,327
  1,455
  1,587
  1,726
  1,869
  2,019
  2,174
  2,336
  2,504
  2,678
  2,860
Earnings before tax, $m
  354
  464
  617
  798
  1,016
  1,272
  1,569
  1,908
  2,289
  2,713
  3,179
  3,688
  4,238
  4,828
  5,457
  6,125
  6,830
  7,573
  8,351
  9,166
  10,017
  10,903
  11,827
  12,787
  13,786
  14,824
  15,902
  17,023
  18,188
  19,399
  20,658
Tax expense, $m
  1
  125
  166
  216
  274
  344
  424
  515
  618
  732
  858
  996
  1,144
  1,304
  1,473
  1,654
  1,844
  2,045
  2,255
  2,475
  2,705
  2,944
  3,193
  3,453
  3,722
  4,002
  4,294
  4,596
  4,911
  5,238
  5,578
Net income, $m
  41
  338
  450
  583
  742
  929
  1,146
  1,393
  1,671
  1,980
  2,321
  2,692
  3,094
  3,524
  3,984
  4,471
  4,986
  5,528
  6,096
  6,691
  7,312
  7,960
  8,634
  9,335
  10,064
  10,821
  11,609
  12,427
  13,277
  14,161
  15,080

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  89
  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
  1,555
  2,015
  2,703
  3,548
  4,564
  5,762
  7,152
  8,741
  10,533
  12,529
  14,728
  17,128
  19,726
  22,517
  25,498
  28,662
  32,008
  35,530
  39,226
  43,095
  47,136
  51,349
  55,737
  60,302
  65,049
  69,983
  75,109
  80,437
  85,975
  91,731
  97,718
Adjusted assets (=assets-cash), $m
  1,466
  2,015
  2,703
  3,548
  4,564
  5,762
  7,152
  8,741
  10,533
  12,529
  14,728
  17,128
  19,726
  22,517
  25,498
  28,662
  32,008
  35,530
  39,226
  43,095
  47,136
  51,349
  55,737
  60,302
  65,049
  69,983
  75,109
  80,437
  85,975
  91,731
  97,718
Revenue / Adjusted assets
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
Average production assets, $m
  1,121
  1,541
  2,067
  2,713
  3,489
  4,405
  5,468
  6,683
  8,053
  9,579
  11,260
  13,095
  15,081
  17,215
  19,494
  21,913
  24,471
  27,163
  29,989
  32,947
  36,036
  39,258
  42,612
  46,103
  49,732
  53,504
  57,423
  61,497
  65,730
  70,131
  74,708
Working capital, $m
  194
  144
  193
  253
  326
  411
  510
  624
  751
  894
  1,051
  1,222
  1,407
  1,606
  1,819
  2,045
  2,283
  2,535
  2,798
  3,074
  3,363
  3,663
  3,976
  4,302
  4,640
  4,992
  5,358
  5,738
  6,133
  6,544
  6,971
Total debt, $m
  595
  956
  1,575
  2,335
  3,249
  4,328
  5,579
  7,009
  8,622
  10,418
  12,397
  14,557
  16,895
  19,408
  22,090
  24,938
  27,949
  31,119
  34,445
  37,927
  41,564
  45,356
  49,305
  53,414
  57,686
  62,126
  66,740
  71,536
  76,519
  81,700
  87,088
Total liabilities, $m
  1,453
  1,814
  2,433
  3,193
  4,107
  5,186
  6,437
  7,867
  9,480
  11,276
  13,255
  15,415
  17,753
  20,266
  22,948
  25,796
  28,807
  31,977
  35,303
  38,785
  42,422
  46,214
  50,163
  54,272
  58,544
  62,984
  67,598
  72,394
  77,377
  82,558
  87,946
Total equity, $m
  102
  202
  270
  355
  456
  576
  715
  874
  1,053
  1,253
  1,473
  1,713
  1,973
  2,252
  2,550
  2,866
  3,201
  3,553
  3,923
  4,309
  4,714
  5,135
  5,574
  6,030
  6,505
  6,998
  7,511
  8,044
  8,597
  9,173
  9,772
Total liabilities and equity, $m
  1,555
  2,016
  2,703
  3,548
  4,563
  5,762
  7,152
  8,741
  10,533
  12,529
  14,728
  17,128
  19,726
  22,518
  25,498
  28,662
  32,008
  35,530
  39,226
  43,094
  47,136
  51,349
  55,737
  60,302
  65,049
  69,982
  75,109
  80,438
  85,974
  91,731
  97,718
Debt-to-equity ratio
  5.833
  4.740
  5.830
  6.580
  7.120
  7.510
  7.800
  8.020
  8.190
  8.320
  8.420
  8.500
  8.570
  8.620
  8.660
  8.700
  8.730
  8.760
  8.780
  8.800
  8.820
  8.830
  8.850
  8.860
  8.870
  8.880
  8.890
  8.890
  8.900
  8.910
  8.910
Adjusted equity ratio
  0.009
  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
  41
  338
  450
  583
  742
  929
  1,146
  1,393
  1,671
  1,980
  2,321
  2,692
  3,094
  3,524
  3,984
  4,471
  4,986
  5,528
  6,096
  6,691
  7,312
  7,960
  8,634
  9,335
  10,064
  10,821
  11,609
  12,427
  13,277
  14,161
  15,080
Depreciation, amort., depletion, $m
  98
  135
  180
  236
  304
  384
  476
  582
  701
  834
  980
  1,139
  1,311
  1,497
  1,695
  1,905
  2,128
  2,362
  2,608
  2,865
  3,134
  3,414
  3,705
  4,009
  4,324
  4,652
  4,993
  5,348
  5,716
  6,098
  6,496
Funds from operations, $m
  120
  473
  630
  819
  1,046
  1,312
  1,622
  1,975
  2,372
  2,814
  3,301
  3,831
  4,405
  5,021
  5,679
  6,377
  7,114
  7,890
  8,704
  9,556
  10,446
  11,373
  12,339
  13,344
  14,388
  15,474
  16,602
  17,774
  18,993
  20,259
  21,577
Change in working capital, $m
  -168
  39
  49
  60
  72
  85
  99
  113
  128
  142
  157
  171
  185
  199
  213
  226
  239
  251
  264
  276
  288
  301
  313
  326
  339
  352
  366
  380
  395
  411
  427
Cash from operations, $m
  288
  434
  581
  759
  973
  1,227
  1,522
  1,861
  2,244
  2,672
  3,144
  3,660
  4,220
  4,822
  5,466
  6,151
  6,875
  7,639
  8,441
  9,280
  10,158
  11,073
  12,026
  13,018
  14,050
  15,122
  16,236
  17,394
  18,598
  19,849
  21,150
Maintenance CAPEX, $m
  0
  -97
  -134
  -180
  -236
  -303
  -383
  -475
  -581
  -700
  -833
  -979
  -1,139
  -1,311
  -1,497
  -1,695
  -1,905
  -2,128
  -2,362
  -2,608
  -2,865
  -3,134
  -3,414
  -3,705
  -4,009
  -4,324
  -4,652
  -4,993
  -5,348
  -5,716
  -6,098
New CAPEX, $m
  -300
  -420
  -526
  -646
  -776
  -916
  -1,063
  -1,215
  -1,370
  -1,526
  -1,681
  -1,835
  -1,986
  -2,134
  -2,279
  -2,420
  -2,557
  -2,693
  -2,826
  -2,958
  -3,089
  -3,221
  -3,355
  -3,490
  -3,629
  -3,772
  -3,920
  -4,073
  -4,233
  -4,401
  -4,577
Cash from investing activities, $m
  -299
  -517
  -660
  -826
  -1,012
  -1,219
  -1,446
  -1,690
  -1,951
  -2,226
  -2,514
  -2,814
  -3,125
  -3,445
  -3,776
  -4,115
  -4,462
  -4,821
  -5,188
  -5,566
  -5,954
  -6,355
  -6,769
  -7,195
  -7,638
  -8,096
  -8,572
  -9,066
  -9,581
  -10,117
  -10,675
Free cash flow, $m
  -11
  -83
  -79
  -67
  -39
  7
  76
  171
  293
  446
  630
  846
  1,095
  1,377
  1,691
  2,036
  2,412
  2,818
  3,253
  3,715
  4,203
  4,718
  5,258
  5,822
  6,412
  7,025
  7,664
  8,328
  9,017
  9,732
  10,475
Issuance/(repayment) of debt, $m
  211
  361
  620
  760
  914
  1,078
  1,251
  1,430
  1,613
  1,796
  1,979
  2,160
  2,338
  2,512
  2,682
  2,848
  3,011
  3,170
  3,327
  3,482
  3,637
  3,792
  3,949
  4,109
  4,272
  4,440
  4,614
  4,795
  4,984
  5,181
  5,388
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  
  -34
  361
  620
  760
  914
  1,078
  1,251
  1,430
  1,613
  1,796
  1,979
  2,160
  2,338
  2,512
  2,682
  2,848
  3,011
  3,170
  3,327
  3,482
  3,637
  3,792
  3,949
  4,109
  4,272
  4,440
  4,614
  4,795
  4,984
  5,181
  5,388
Total cash flow (excl. dividends), $m
  -46
  277
  541
  694
  875
  1,086
  1,328
  1,601
  1,906
  2,242
  2,609
  3,006
  3,433
  3,889
  4,373
  4,885
  5,423
  5,988
  6,579
  7,197
  7,840
  8,510
  9,207
  9,931
  10,684
  11,466
  12,278
  13,123
  14,000
  14,913
  15,862
Retained Cash Flow (-), $m
  -5
  -189
  -69
  -84
  -102
  -120
  -139
  -159
  -179
  -200
  -220
  -240
  -260
  -279
  -298
  -316
  -335
  -352
  -370
  -387
  -404
  -421
  -439
  -457
  -475
  -493
  -513
  -533
  -554
  -576
  -599
Prev. year cash balance distribution, $m
 
  89
  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
 
  178
  472
  609
  773
  966
  1,189
  1,442
  1,726
  2,042
  2,389
  2,766
  3,173
  3,610
  4,075
  4,568
  5,089
  5,636
  6,210
  6,810
  7,436
  8,089
  8,768
  9,474
  10,209
  10,972
  11,766
  12,590
  13,447
  14,337
  15,264
Discount rate, %
 
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
 
  169
  426
  519
  617
  719
  820
  916
  1,002
  1,075
  1,132
  1,169
  1,185
  1,180
  1,154
  1,109
  1,046
  969
  881
  786
  688
  591
  498
  410
  331
  261
  202
  152
  112
  80
  56
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

Westlake Chemical Partners LP is a limited partnership formed by Westlake Chemical Corporation (Westlake). The Company operates, acquires and develops ethylene production facilities and other assets. Its business and operations are conducted through Westlake Chemical OpCo LP (OpCo). OpCo sells ethylene to Westlake and others, as well as sells co-products of ethylene production, including propylene, crude butadiene, pyrolysis gasoline and hydrogen. As of December 31, 2016, OpCo's assets included three ethylene production facilities, which primarily convert ethane into ethylene, and a 200-mile ethylene pipeline. As of December 31, 2016, OpCo owned two ethylene production facilities at Westlake's Lake Charles, Louisiana site (Petro 1 and Petro 2, collectively Lake Charles Olefins), and one ethylene production facility at Westlake's Calvert City, Kentucky site (Calvert City Olefins), with an annual capacity of approximately 630 million pounds.

FINANCIAL RATIOS  of  Westlake Chemical Partners (WLKP)

Valuation Ratios
P/E Ratio 15.1
Price to Sales 0.6
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow 2.2
Price to Free Cash Flow -51.6
Growth Rates
Sales Growth Rate -2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 29.9%
Cap. Spend. - 3 Yr. Gr. Rate 6.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 583.3%
Total Debt to Equity 583.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.9%
Ret/ On Assets - 3 Yr. Avg. 13.8%
Return On Total Capital 7%
Ret/ On T. Cap. - 3 Yr. Avg. 30.1%
Return On Equity 41.2%
Return On Equity - 3 Yr. Avg. 74.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 39.6%
Gross Margin - 3 Yr. Avg. 40.1%
EBITDA Margin 45.8%
EBITDA Margin - 3 Yr. Avg. 44.7%
Operating Margin 37.2%
Oper. Margin - 3 Yr. Avg. 37.9%
Pre-Tax Margin 35.9%
Pre-Tax Margin - 3 Yr. Avg. 37.2%
Net Profit Margin 4.2%
Net Profit Margin - 3 Yr. Avg. 9.9%
Effective Tax Rate 0.3%
Eff/ Tax Rate - 3 Yr. Avg. 9.5%
Payout Ratio 85.4%

WLKP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WLKP stock intrinsic value calculation we used $987 million for the last fiscal year's total revenue generated by Westlake Chemical Partners. The default revenue input number comes from 2016 income statement of Westlake Chemical Partners. 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 WLKP stock valuation model: a) initial revenue growth rate of 37.4% 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 5%, whose default value for WLKP is calculated based on our internal credit rating of Westlake Chemical Partners, 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 Westlake Chemical Partners.
    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 WLKP stock the variable cost ratio is equal to 64.3%.

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 WLKP 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 Westlake Chemical Partners.

Corporate tax rate of 27% is the nominal tax rate for Westlake Chemical Partners. 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 WLKP 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 WLKP are equal to 113.6%.

Life of production assets of 11.5 years is the average useful life of capital assets used in Westlake Chemical Partners 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 WLKP is equal to 10.6%. 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 - $102 million for Westlake Chemical Partners - 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 31.56 million for Westlake Chemical Partners 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 Westlake Chemical Partners at the current share price and the inputted number of shares is $0.7 billion.

RELATED COMPANIES Price Int.Val. Rating
WLK Westlake Chemi 83.82 447.23  str.buy
LYB LyondellBasell 98.94 325.28  str.buy
TREC Trecora Resour 12.30 5.52  str.sell
WMB Williams 29.33 1.40  str.sell
GEVO Gevo 0.660 1.06  str.buy

COMPANY NEWS

▶ At $22.7, Is Westlake Chemical Partners LP (WLKP) A Buy?   [Oct-02-17 11:57AM  Simply Wall St.]
▶ These 3 Stocks Just Raised Their Dividends   [Sep-02-17 06:33AM  Motley Fool]
▶ Analyzing Westlake Chemicals Stock Performance   [Sep-01-17 09:06AM  Market Realist]
▶ Analysts Consensus on Westlake Chemical   [Aug-31-17 10:37AM  Market Realist]
▶ Westlake Chemical Has a Low Dividend Yield   [09:07AM  Market Realist]
▶ Company News For August 22, 2017   [Aug-22-17 10:11AM  Zacks]
▶ Westlake Chemical Partners posts 2Q profit   [08:29AM  Associated Press]
▶ Westlake tops 2Q profit forecasts   [07:49AM  Associated Press]
▶ Top Ranked Value Stocks to Buy for June 8th   [Jun-08-17 10:56AM  Zacks]
▶ Top Ranked Value Stocks to Buy for June 6th   [Jun-06-17 10:54AM  Zacks]
▶ Westlake Chemical Partners posts 1Q profit   [06:43AM  Associated Press]
▶ Westlake beats 1Q profit forecasts   [06:39AM  Associated Press]
▶ Westlake Chemical Partners LP Filed Annual Report   [Mar-09-17 06:45AM  Business Wire]
▶ Westlake Chemical Partners posts 4Q profit   [09:31AM  Associated Press]
▶ Westlake tops 4Q profit forecasts   [09:29AM  Associated Press]
▶ Executive order freezes new MLP regulations   [Jan-23-17 04:05PM  at bizjournals.com]
Financial statements of WLKP
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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