Intrinsic value of Collectors Universe - CLCT

Previous Close

$28.37

  Intrinsic Value

$62.88

stock screener

  Rating & Target

str. buy

+122%

Previous close

$28.37

 
Intrinsic value

$62.88

 
Up/down potential

+122%

 
Rating

str. buy

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

We calculate the intrinsic value of CLCT 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, %
  14.75
  25.00
  23.00
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
Revenue, $m
  70
  88
  108
  130
  156
  184
  215
  249
  285
  324
  365
  409
  455
  503
  554
  607
  663
  720
  780
  843
  908
  975
  1,045
  1,118
  1,194
  1,273
  1,355
  1,440
  1,529
  1,621
  1,717
Variable operating expenses, $m
 
  70
  86
  104
  125
  147
  172
  199
  227
  258
  291
  326
  363
  401
  442
  484
  528
  574
  622
  672
  724
  777
  833
  891
  952
  1,015
  1,080
  1,148
  1,219
  1,292
  1,369
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
  57
  70
  86
  104
  125
  147
  172
  199
  227
  258
  291
  326
  363
  401
  442
  484
  528
  574
  622
  672
  724
  777
  833
  891
  952
  1,015
  1,080
  1,148
  1,219
  1,292
  1,369
Operating income, $m
  13
  18
  22
  26
  31
  37
  43
  50
  58
  66
  74
  83
  92
  102
  112
  123
  134
  146
  158
  171
  184
  198
  212
  227
  242
  258
  275
  292
  310
  329
  348
EBITDA, $m
  15
  19
  23
  28
  34
  40
  47
  54
  62
  70
  79
  89
  99
  109
  120
  132
  144
  156
  169
  183
  197
  212
  227
  243
  259
  276
  294
  313
  332
  352
  373
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
Earnings before tax, $m
  13
  18
  22
  26
  31
  37
  43
  49
  56
  64
  72
  81
  90
  100
  110
  120
  131
  142
  154
  166
  179
  192
  206
  221
  235
  251
  267
  284
  301
  319
  338
Tax expense, $m
  4
  5
  6
  7
  8
  10
  12
  13
  15
  17
  20
  22
  24
  27
  30
  32
  35
  38
  42
  45
  48
  52
  56
  60
  64
  68
  72
  77
  81
  86
  91
Net income, $m
  9
  13
  16
  19
  23
  27
  31
  36
  41
  47
  53
  59
  66
  73
  80
  88
  96
  104
  112
  121
  131
  140
  151
  161
  172
  183
  195
  207
  220
  233
  247

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  10
  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
  29
  24
  29
  35
  42
  50
  58
  68
  77
  88
  99
  111
  124
  137
  150
  165
  180
  196
  212
  229
  246
  265
  284
  304
  324
  345
  368
  391
  415
  440
  466
Adjusted assets (=assets-cash), $m
  19
  24
  29
  35
  42
  50
  58
  68
  77
  88
  99
  111
  124
  137
  150
  165
  180
  196
  212
  229
  246
  265
  284
  304
  324
  345
  368
  391
  415
  440
  466
Revenue / Adjusted assets
  3.684
  3.667
  3.724
  3.714
  3.714
  3.680
  3.707
  3.662
  3.701
  3.682
  3.687
  3.685
  3.669
  3.672
  3.693
  3.679
  3.683
  3.673
  3.679
  3.681
  3.691
  3.679
  3.680
  3.678
  3.685
  3.690
  3.682
  3.683
  3.684
  3.684
  3.685
Average production assets, $m
  5
  6
  8
  9
  11
  13
  15
  18
  20
  23
  26
  29
  32
  36
  39
  43
  47
  51
  55
  60
  64
  69
  74
  79
  85
  90
  96
  102
  109
  115
  122
Working capital, $m
  6
  -5
  -6
  -7
  -9
  -11
  -12
  -14
  -16
  -18
  -21
  -23
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -48
  -52
  -56
  -60
  -64
  -68
  -73
  -77
  -82
  -87
  -92
  -98
Total debt, $m
  0
  3
  7
  11
  16
  21
  27
  33
  40
  47
  55
  63
  71
  80
  90
  100
  110
  121
  132
  144
  156
  168
  181
  195
  209
  223
  239
  254
  271
  288
  306
Total liabilities, $m
  13
  16
  20
  24
  29
  34
  40
  46
  53
  60
  68
  76
  84
  93
  103
  113
  123
  134
  145
  157
  169
  181
  194
  208
  222
  236
  252
  267
  284
  301
  319
Total equity, $m
  16
  8
  9
  11
  13
  16
  18
  21
  24
  28
  31
  35
  39
  43
  48
  52
  57
  62
  67
  72
  78
  84
  90
  96
  102
  109
  116
  124
  131
  139
  147
Total liabilities and equity, $m
  29
  24
  29
  35
  42
  50
  58
  67
  77
  88
  99
  111
  123
  136
  151
  165
  180
  196
  212
  229
  247
  265
  284
  304
  324
  345
  368
  391
  415
  440
  466
Debt-to-equity ratio
  0.000
  0.430
  0.760
  1.000
  1.190
  1.340
  1.460
  1.560
  1.630
  1.700
  1.750
  1.790
  1.830
  1.860
  1.890
  1.920
  1.940
  1.950
  1.970
  1.980
  2.000
  2.010
  2.020
  2.030
  2.040
  2.050
  2.050
  2.060
  2.070
  2.070
  2.080
Adjusted equity ratio
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9
  13
  16
  19
  23
  27
  31
  36
  41
  47
  53
  59
  66
  73
  80
  88
  96
  104
  112
  121
  131
  140
  151
  161
  172
  183
  195
  207
  220
  233
  247
Depreciation, amort., depletion, $m
  2
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
Funds from operations, $m
  10
  14
  17
  21
  25
  30
  34
  40
  45
  52
  58
  65
  72
  80
  88
  96
  105
  114
  124
  133
  144
  154
  165
  177
  189
  201
  214
  228
  242
  256
  271
Change in working capital, $m
  -2
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
Cash from operations, $m
  12
  15
  19
  22
  27
  31
  36
  42
  48
  54
  60
  67
  75
  83
  91
  99
  108
  117
  127
  137
  147
  158
  169
  181
  193
  206
  219
  232
  247
  261
  277
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
New CAPEX, $m
  -2
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
Cash from investing activities, $m
  -2
  -2
  -2
  -4
  -4
  -4
  -5
  -5
  -7
  -7
  -8
  -8
  -9
  -9
  -11
  -12
  -13
  -13
  -14
  -15
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -29
  -30
Free cash flow, $m
  10
  13
  16
  19
  23
  27
  31
  36
  41
  47
  53
  59
  66
  73
  80
  88
  96
  104
  113
  121
  131
  140
  151
  161
  172
  183
  195
  207
  220
  233
  247
Issuance/(repayment) of debt, $m
  0
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
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  
  0
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
Total cash flow (excl. dividends), $m
  10
  16
  20
  23
  28
  32
  37
  42
  48
  54
  61
  67
  74
  82
  89
  98
  106
  115
  124
  133
  143
  153
  164
  175
  186
  198
  210
  223
  236
  250
  265
Retained Cash Flow (-), $m
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
Prev. year cash balance distribution, $m
 
  10
  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
 
  25
  18
  21
  25
  30
  34
  40
  45
  51
  57
  64
  70
  78
  85
  93
  101
  110
  118
  128
  137
  147
  158
  168
  179
  191
  203
  216
  229
  242
  257
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  24
  16
  19
  21
  23
  25
  27
  28
  29
  30
  30
  30
  29
  29
  27
  26
  24
  22
  20
  17
  15
  13
  11
  9
  7
  6
  5
  4
  3
  2
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
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Collectors Universe, Inc. provides authentication and grading services to dealers and collectors of coins, trading cards, event tickets, autographs and historical and sports memorabilia (collectibles). The Company operates through three segments: coins, trading cards and autographs, and other collectibles. The Company is engaged in the authentication, grading, publication and Web-based advertising, subscription-based business and product sales. The other collectibles segment includes the Certified Coin Exchange (CCE) subscription business, the Coinflation.com business and its collectibles conventions business. The Company is also engaged in selling of printed publications and collectibles price guides and advertising in such publications; selling of membership subscriptions in its Collectors Club; selling of subscriptions to its CCE dealer-to-dealer Internet bid-ask market for certified coins and to its CoinFacts Website, and conducting collectibles trade shows and conventions.

FINANCIAL RATIOS  of  Collectors Universe (CLCT)

Valuation Ratios
P/E Ratio 28.1
Price to Sales 3.6
Price to Book 15.8
Price to Tangible Book
Price to Cash Flow 21.1
Price to Free Cash Flow 25.3
Growth Rates
Sales Growth Rate 14.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 31.6%
Ret/ On Assets - 3 Yr. Avg. 26.3%
Return On Total Capital 58.1%
Ret/ On T. Cap. - 3 Yr. Avg. 47.5%
Return On Equity 58.1%
Return On Equity - 3 Yr. Avg. 47.5%
Asset Turnover 2.5
Profitability Ratios
Gross Margin 61.4%
Gross Margin - 3 Yr. Avg. 62.2%
EBITDA Margin 21.4%
EBITDA Margin - 3 Yr. Avg. 21.8%
Operating Margin 18.6%
Oper. Margin - 3 Yr. Avg. 19.2%
Pre-Tax Margin 18.6%
Pre-Tax Margin - 3 Yr. Avg. 19.2%
Net Profit Margin 12.9%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 30.8%
Eff/ Tax Rate - 3 Yr. Avg. 35.3%
Payout Ratio 133.3%

CLCT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLCT stock intrinsic value calculation we used $70 million for the last fiscal year's total revenue generated by Collectors Universe. The default revenue input number comes from 2017 income statement of Collectors Universe. 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 CLCT stock valuation model: a) initial revenue growth rate of 25% 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 4.3%, whose default value for CLCT is calculated based on our internal credit rating of Collectors Universe, 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 Collectors Universe.
    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 CLCT stock the variable cost ratio is equal to 80%.

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 CLCT 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 Collectors Universe.

Corporate tax rate of 27% is the nominal tax rate for Collectors Universe. 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 CLCT 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 CLCT are equal to 7.1%.

Life of production assets of 3.5 years is the average useful life of capital assets used in Collectors Universe 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 CLCT is equal to -5.7%. 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 - $16 million for Collectors Universe - 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 9.139 million for Collectors Universe 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 Collectors Universe at the current share price and the inputted number of shares is $0.3 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ 3 High-Yield Stocks to Buy That You Havent Heard Of   [Dec-19-17 11:33AM  InvestorPlace]
▶ Collectors Universe Gets IBD Stock Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ Collectors Universe posts 1Q profit   [Nov-02-17 05:09PM  Associated Press]
▶ What Are The Drivers Of Collectors Universe Incs (CLCT) Risks?   [Sep-19-17 05:39PM  Simply Wall St.]
▶ Collectors Universe posts 4Q profit   [Aug-31-17 11:00PM  Associated Press]
▶ Collectors Universe posts 3Q profit   [May-03-17 07:11PM  Associated Press]
▶ Investors Might Collect 5.5% Yield From This Memorabilia Appraisal Stock   [Mar-28-17 11:26AM  Investor's Business Daily]
▶ Collectors Universe posts 2Q profit   [05:18PM  Associated Press]
Financial statements of CLCT
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