Intrinsic value of Arthur J. Gallagher - AJG

Previous Close

$63.98

  Intrinsic Value

$85.30

stock screener

  Rating & Target

buy

+33%

Previous close

$63.98

 
Intrinsic value

$85.30

 
Up/down potential

+33%

 
Rating

buy

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

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

We calculate the intrinsic value of AJG 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 11.5

 

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, %
  3.76
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  5,595
  6,127
  6,681
  7,259
  7,860
  8,485
  9,134
  9,809
  10,511
  11,240
  11,998
  12,786
  13,606
  14,459
  15,348
  16,273
  17,238
  18,243
  19,292
  20,387
  21,531
  22,725
  23,973
  25,278
  26,643
  28,070
  29,565
  31,129
  32,767
  34,482
  36,279
Variable operating expenses, $m
 
  3,946
  4,269
  4,606
  4,956
  5,320
  5,699
  6,092
  6,501
  6,926
  7,368
  7,450
  7,928
  8,425
  8,942
  9,482
  10,044
  10,630
  11,241
  11,879
  12,545
  13,241
  13,968
  14,728
  15,523
  16,355
  17,226
  18,137
  19,092
  20,091
  21,138
Fixed operating expenses, $m
 
  1,565
  1,604
  1,644
  1,686
  1,728
  1,771
  1,815
  1,861
  1,907
  1,955
  2,004
  2,054
  2,105
  2,158
  2,212
  2,267
  2,324
  2,382
  2,441
  2,502
  2,565
  2,629
  2,695
  2,762
  2,831
  2,902
  2,974
  3,049
  3,125
  3,203
Total operating expenses, $m
  5,128
  5,511
  5,873
  6,250
  6,642
  7,048
  7,470
  7,907
  8,362
  8,833
  9,323
  9,454
  9,982
  10,530
  11,100
  11,694
  12,311
  12,954
  13,623
  14,320
  15,047
  15,806
  16,597
  17,423
  18,285
  19,186
  20,128
  21,111
  22,141
  23,216
  24,341
Operating income, $m
  467
  615
  807
  1,008
  1,218
  1,437
  1,665
  1,902
  2,149
  2,407
  2,676
  3,333
  3,625
  3,930
  4,248
  4,580
  4,927
  5,290
  5,670
  6,067
  6,484
  6,919
  7,376
  7,855
  8,357
  8,884
  9,437
  10,017
  10,626
  11,266
  11,938
EBITDA, $m
  818
  1,111
  1,314
  1,526
  1,747
  1,978
  2,219
  2,469
  2,730
  3,002
  3,286
  3,581
  3,889
  4,210
  4,546
  4,896
  5,262
  5,644
  6,045
  6,463
  6,901
  7,361
  7,842
  8,346
  8,874
  9,429
  10,011
  10,621
  11,262
  11,936
  12,642
Interest expense (income), $m
  113
  99
  129
  160
  193
  227
  262
  299
  337
  377
  418
  461
  505
  551
  600
  650
  702
  756
  813
  872
  934
  999
  1,066
  1,137
  1,210
  1,287
  1,368
  1,452
  1,541
  1,633
  1,730
Earnings before tax, $m
  357
  516
  678
  848
  1,025
  1,210
  1,402
  1,603
  1,813
  2,031
  2,258
  2,872
  3,120
  3,378
  3,648
  3,930
  4,225
  4,534
  4,857
  5,195
  5,549
  5,921
  6,310
  6,718
  7,147
  7,597
  8,069
  8,565
  9,086
  9,633
  10,208
Tax expense, $m
  -88
  139
  183
  229
  277
  327
  379
  433
  489
  548
  610
  776
  842
  912
  985
  1,061
  1,141
  1,224
  1,311
  1,403
  1,498
  1,599
  1,704
  1,814
  1,930
  2,051
  2,179
  2,312
  2,453
  2,601
  2,756
Net income, $m
  414
  377
  495
  619
  748
  883
  1,024
  1,170
  1,323
  1,482
  1,648
  2,097
  2,277
  2,466
  2,663
  2,869
  3,084
  3,310
  3,546
  3,792
  4,051
  4,322
  4,606
  4,904
  5,217
  5,546
  5,890
  6,252
  6,633
  7,032
  7,452

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  546
  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
  11,490
  11,989
  13,074
  14,205
  15,381
  16,604
  17,875
  19,197
  20,570
  21,997
  23,480
  25,022
  26,627
  28,296
  30,035
  31,846
  33,733
  35,701
  37,754
  39,897
  42,134
  44,472
  46,914
  49,468
  52,138
  54,932
  57,856
  60,918
  64,123
  67,480
  70,997
Adjusted assets (=assets-cash), $m
  10,944
  11,989
  13,074
  14,205
  15,381
  16,604
  17,875
  19,197
  20,570
  21,997
  23,480
  25,022
  26,627
  28,296
  30,035
  31,846
  33,733
  35,701
  37,754
  39,897
  42,134
  44,472
  46,914
  49,468
  52,138
  54,932
  57,856
  60,918
  64,123
  67,480
  70,997
Revenue / Adjusted assets
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
Average production assets, $m
  1,663
  1,820
  1,984
  2,156
  2,334
  2,520
  2,713
  2,913
  3,122
  3,338
  3,563
  3,798
  4,041
  4,294
  4,558
  4,833
  5,120
  5,418
  5,730
  6,055
  6,395
  6,749
  7,120
  7,508
  7,913
  8,337
  8,781
  9,245
  9,732
  10,241
  10,775
Working capital, $m
  -196
  -43
  -47
  -51
  -55
  -59
  -64
  -69
  -74
  -79
  -84
  -90
  -95
  -101
  -107
  -114
  -121
  -128
  -135
  -143
  -151
  -159
  -168
  -177
  -186
  -196
  -207
  -218
  -229
  -241
  -254
Total debt, $m
  2,848
  3,000
  3,728
  4,486
  5,276
  6,096
  6,949
  7,836
  8,757
  9,715
  10,710
  11,745
  12,822
  13,942
  15,108
  16,324
  17,590
  18,911
  20,288
  21,726
  23,227
  24,795
  26,434
  28,148
  29,940
  31,815
  33,777
  35,831
  37,981
  40,234
  42,594
Total liabilities, $m
  7,893
  8,045
  8,773
  9,531
  10,321
  11,141
  11,994
  12,881
  13,802
  14,760
  15,755
  16,790
  17,867
  18,987
  20,153
  21,369
  22,635
  23,956
  25,333
  26,771
  28,272
  29,840
  31,479
  33,193
  34,985
  36,860
  38,822
  40,876
  43,026
  45,279
  47,639
Total equity, $m
  3,597
  3,944
  4,301
  4,673
  5,060
  5,463
  5,881
  6,316
  6,767
  7,237
  7,725
  8,232
  8,760
  9,310
  9,882
  10,477
  11,098
  11,746
  12,421
  13,126
  13,862
  14,631
  15,435
  16,275
  17,154
  18,073
  19,035
  20,042
  21,096
  22,201
  23,358
Total liabilities and equity, $m
  11,490
  11,989
  13,074
  14,204
  15,381
  16,604
  17,875
  19,197
  20,569
  21,997
  23,480
  25,022
  26,627
  28,297
  30,035
  31,846
  33,733
  35,702
  37,754
  39,897
  42,134
  44,471
  46,914
  49,468
  52,139
  54,933
  57,857
  60,918
  64,122
  67,480
  70,997
Debt-to-equity ratio
  0.792
  0.760
  0.870
  0.960
  1.040
  1.120
  1.180
  1.240
  1.290
  1.340
  1.390
  1.430
  1.460
  1.500
  1.530
  1.560
  1.580
  1.610
  1.630
  1.660
  1.680
  1.690
  1.710
  1.730
  1.750
  1.760
  1.770
  1.790
  1.800
  1.810
  1.820
Adjusted equity ratio
  0.279
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  414
  377
  495
  619
  748
  883
  1,024
  1,170
  1,323
  1,482
  1,648
  2,097
  2,277
  2,466
  2,663
  2,869
  3,084
  3,310
  3,546
  3,792
  4,051
  4,322
  4,606
  4,904
  5,217
  5,546
  5,890
  6,252
  6,633
  7,032
  7,452
Depreciation, amort., depletion, $m
  351
  496
  506
  518
  529
  542
  554
  567
  581
  595
  610
  248
  264
  281
  298
  316
  335
  354
  374
  396
  418
  441
  465
  491
  517
  545
  574
  604
  636
  669
  704
Funds from operations, $m
  653
  872
  1,002
  1,137
  1,278
  1,425
  1,578
  1,738
  1,904
  2,077
  2,258
  2,345
  2,542
  2,747
  2,961
  3,185
  3,419
  3,664
  3,920
  4,188
  4,469
  4,763
  5,072
  5,395
  5,734
  6,090
  6,464
  6,857
  7,269
  7,701
  8,156
Change in working capital, $m
  31
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
Cash from operations, $m
  622
  876
  1,005
  1,141
  1,282
  1,429
  1,582
  1,742
  1,909
  2,083
  2,263
  2,350
  2,547
  2,753
  2,967
  3,192
  3,426
  3,671
  3,927
  4,196
  4,477
  4,772
  5,080
  5,404
  5,744
  6,100
  6,475
  6,868
  7,280
  7,713
  8,169
Maintenance CAPEX, $m
  0
  -109
  -119
  -130
  -141
  -153
  -165
  -177
  -190
  -204
  -218
  -233
  -248
  -264
  -281
  -298
  -316
  -335
  -354
  -374
  -396
  -418
  -441
  -465
  -491
  -517
  -545
  -574
  -604
  -636
  -669
New CAPEX, $m
  -218
  -157
  -165
  -172
  -179
  -186
  -193
  -201
  -208
  -217
  -225
  -234
  -244
  -253
  -264
  -275
  -286
  -299
  -312
  -325
  -340
  -355
  -371
  -388
  -405
  -424
  -444
  -465
  -486
  -510
  -534
Cash from investing activities, $m
  -569
  -266
  -284
  -302
  -320
  -339
  -358
  -378
  -398
  -421
  -443
  -467
  -492
  -517
  -545
  -573
  -602
  -634
  -666
  -699
  -736
  -773
  -812
  -853
  -896
  -941
  -989
  -1,039
  -1,090
  -1,146
  -1,203
Free cash flow, $m
  53
  611
  722
  839
  962
  1,091
  1,225
  1,364
  1,510
  1,662
  1,820
  1,883
  2,056
  2,235
  2,423
  2,619
  2,824
  3,038
  3,262
  3,496
  3,742
  3,999
  4,269
  4,551
  4,848
  5,159
  5,486
  5,829
  6,189
  6,568
  6,966
Issuance/(repayment) of debt, $m
  397
  698
  728
  758
  789
  821
  853
  887
  921
  957
  995
  1,035
  1,077
  1,120
  1,167
  1,215
  1,266
  1,320
  1,378
  1,438
  1,501
  1,568
  1,639
  1,713
  1,792
  1,875
  1,962
  2,054
  2,151
  2,253
  2,360
Issuance/(repurchase) of shares, $m
  -55
  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  
  306
  698
  728
  758
  789
  821
  853
  887
  921
  957
  995
  1,035
  1,077
  1,120
  1,167
  1,215
  1,266
  1,320
  1,378
  1,438
  1,501
  1,568
  1,639
  1,713
  1,792
  1,875
  1,962
  2,054
  2,151
  2,253
  2,360
Total cash flow (excl. dividends), $m
  337
  1,309
  1,450
  1,598
  1,752
  1,911
  2,078
  2,251
  2,431
  2,619
  2,815
  2,918
  3,132
  3,356
  3,589
  3,834
  4,090
  4,358
  4,639
  4,934
  5,243
  5,567
  5,908
  6,265
  6,640
  7,034
  7,448
  7,883
  8,340
  8,821
  9,325
Retained Cash Flow (-), $m
  41
  -347
  -357
  -372
  -387
  -402
  -418
  -435
  -452
  -469
  -488
  -507
  -528
  -549
  -572
  -596
  -621
  -647
  -675
  -705
  -736
  -769
  -804
  -840
  -879
  -919
  -962
  -1,007
  -1,055
  -1,105
  -1,157
Prev. year cash balance distribution, $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 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
 
  961
  1,093
  1,226
  1,365
  1,509
  1,660
  1,816
  1,980
  2,150
  2,327
  2,411
  2,604
  2,806
  3,017
  3,238
  3,469
  3,711
  3,964
  4,229
  4,507
  4,798
  5,104
  5,425
  5,761
  6,115
  6,486
  6,876
  7,286
  7,716
  8,168
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  902
  958
  996
  1,021
  1,032
  1,029
  1,012
  983
  942
  891
  797
  735
  668
  598
  527
  457
  389
  325
  267
  215
  170
  131
  99
  73
  52
  37
  25
  17
  11
  7
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

Arthur J. Gallagher & Co. and its subsidiaries are engaged in providing insurance brokerage and consulting services, and third-party claims settlement and administration services to both domestic and international entities. The Company operates through three segments: brokerage, risk management and corporate. The brokerage segment primarily consists of retail and wholesale insurance brokerage operations. Its retail brokerage operations negotiate and place property/casualty, employer-provided health and welfare insurance, and healthcare exchange and retirement solutions principally for middle-market commercial, industrial, public entity, religious and not-for-profit entities. The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments.

FINANCIAL RATIOS  of  Arthur J. Gallagher (AJG)

Valuation Ratios
P/E Ratio 27.6
Price to Sales 2
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 18.3
Price to Free Cash Flow 28.2
Growth Rates
Sales Growth Rate 3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 120.2%
Cap. Spend. - 3 Yr. Gr. Rate 18.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 59.6%
Total Debt to Equity 79.2%
Interest Coverage 4
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 6.6%
Ret/ On T. Cap. - 3 Yr. Avg. 6.4%
Return On Equity 11.4%
Return On Equity - 3 Yr. Avg. 11.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 29.4%
Gross Margin - 3 Yr. Avg. 29.9%
EBITDA Margin 14.7%
EBITDA Margin - 3 Yr. Avg. 13.8%
Operating Margin 8.3%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 5.9%
Net Profit Margin 7.4%
Net Profit Margin - 3 Yr. Avg. 6.9%
Effective Tax Rate -24.6%
Eff/ Tax Rate - 3 Yr. Avg. -23.5%
Payout Ratio 65.7%

AJG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AJG stock intrinsic value calculation we used $5595 million for the last fiscal year's total revenue generated by Arthur J. Gallagher. The default revenue input number comes from 2016 income statement of Arthur J. Gallagher. 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 AJG stock valuation model: a) initial revenue growth rate of 9.5% 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 6.5%, whose default value for AJG is calculated based on our internal credit rating of Arthur J. Gallagher, 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 Arthur J. Gallagher.
    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 AJG stock the variable cost ratio is equal to 65%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1527 million in the base year in the intrinsic value calculation for AJG 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 4.3% for Arthur J. Gallagher.

Corporate tax rate of 27% is the nominal tax rate for Arthur J. Gallagher. 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 AJG 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 AJG are equal to 29.7%.

Life of production assets of 15.3 years is the average useful life of capital assets used in Arthur J. Gallagher 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 AJG is equal to -0.7%. 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 - $3597 million for Arthur J. Gallagher - 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 180.229 million for Arthur J. Gallagher 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 Arthur J. Gallagher at the current share price and the inputted number of shares is $11.5 billion.

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COMPANY NEWS

▶ Stocks With Rising Relative Strength: Gallagher Arthur J & Co   [03:00AM  Investor's Business Daily]
▶ Arthur J. Gallagher beats Street 3Q forecasts   [Oct-26-17 04:33PM  Associated Press]
▶ Illinois-based insurance firm acquires long-standing Santa Fe co.   [Oct-16-17 03:45PM  American City Business Journals]
▶ Arthur J. Gallagher & Co. Acquires DiBrina Group   [Oct-05-17 09:00AM  PR Newswire]
▶ Arthur J. Gallagher & Co. Acquires Lutgert Insurance   [Sep-25-17 09:00AM  PR Newswire]
▶ Arthur J. Gallagher & Co. Acquires GPL Assurance Inc.   [Aug-03-17 04:47PM  PR Newswire]
▶ Arthur J. Gallagher beats Street 2Q forecasts   [Jul-27-17 09:53PM  Associated Press]
▶ Arthur J. Gallagher beats Street 2Q forecasts   [05:09PM  Associated Press]
Financial statements of AJG
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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