Intrinsic value of Magna International - MGA

Previous Close

$55.82

  Intrinsic Value

$88.33

stock screener

  Rating & Target

str. buy

+58%

Previous close

$55.82

 
Intrinsic value

$88.33

 
Up/down potential

+58%

 
Rating

str. buy

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

We calculate the intrinsic value of MGA 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 20.5

 

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, %
  13.42
  2.60
  2.84
  3.06
  3.25
  3.43
  3.58
  3.72
  3.85
  3.97
  4.07
  4.16
  4.25
  4.32
  4.39
  4.45
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.76
  4.79
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
Revenue, $m
  36,445
  37,393
  38,455
  39,630
  40,918
  42,319
  43,836
  45,468
  47,220
  49,093
  51,091
  53,218
  55,478
  57,876
  60,417
  63,106
  65,949
  68,954
  72,125
  75,472
  79,001
  82,720
  86,639
  90,766
  95,111
  99,685
  104,497
  109,560
  114,885
  120,485
  126,373
Variable operating expenses, $m
 
  34,284
  35,252
  36,324
  37,498
  38,776
  40,158
  41,647
  43,244
  44,951
  46,773
  48,520
  50,581
  52,767
  55,083
  57,535
  60,128
  62,867
  65,758
  68,809
  72,027
  75,418
  78,991
  82,754
  86,715
  90,885
  95,273
  99,889
  104,744
  109,849
  115,217
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
  33,665
  34,284
  35,252
  36,324
  37,498
  38,776
  40,158
  41,647
  43,244
  44,951
  46,773
  48,520
  50,581
  52,767
  55,083
  57,535
  60,128
  62,867
  65,758
  68,809
  72,027
  75,418
  78,991
  82,754
  86,715
  90,885
  95,273
  99,889
  104,744
  109,849
  115,217
Operating income, $m
  2,780
  3,109
  3,202
  3,306
  3,420
  3,544
  3,677
  3,821
  3,976
  4,141
  4,318
  4,698
  4,897
  5,109
  5,333
  5,571
  5,822
  6,087
  6,367
  6,662
  6,974
  7,302
  7,648
  8,013
  8,396
  8,800
  9,225
  9,672
  10,142
  10,636
  11,156
EBITDA, $m
  3,836
  4,063
  4,179
  4,306
  4,446
  4,598
  4,763
  4,941
  5,131
  5,334
  5,552
  5,783
  6,028
  6,289
  6,565
  6,857
  7,166
  7,493
  7,837
  8,201
  8,584
  8,988
  9,414
  9,863
  10,335
  10,832
  11,355
  11,905
  12,484
  13,092
  13,732
Interest expense (income), $m
  99
  84
  94
  107
  120
  135
  151
  169
  188
  208
  230
  253
  277
  303
  331
  360
  391
  424
  459
  496
  534
  575
  618
  663
  711
  761
  814
  869
  928
  989
  1,054
Earnings before tax, $m
  2,780
  3,025
  3,108
  3,199
  3,300
  3,408
  3,526
  3,653
  3,788
  3,934
  4,088
  4,445
  4,620
  4,806
  5,002
  5,210
  5,430
  5,663
  5,908
  6,167
  6,440
  6,727
  7,030
  7,349
  7,685
  8,039
  8,411
  8,802
  9,214
  9,647
  10,102
Tax expense, $m
  706
  817
  839
  864
  891
  920
  952
  986
  1,023
  1,062
  1,104
  1,200
  1,247
  1,298
  1,351
  1,407
  1,466
  1,529
  1,595
  1,665
  1,739
  1,816
  1,898
  1,984
  2,075
  2,170
  2,271
  2,377
  2,488
  2,605
  2,727
Net income, $m
  2,031
  2,208
  2,269
  2,336
  2,409
  2,488
  2,574
  2,666
  2,766
  2,872
  2,984
  3,245
  3,373
  3,508
  3,652
  3,804
  3,964
  4,134
  4,313
  4,502
  4,701
  4,911
  5,132
  5,365
  5,610
  5,868
  6,140
  6,426
  6,726
  7,042
  7,374

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  974
  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
  22,566
  22,152
  22,781
  23,477
  24,240
  25,071
  25,969
  26,936
  27,974
  29,083
  30,267
  31,527
  32,866
  34,287
  35,792
  37,385
  39,070
  40,849
  42,728
  44,711
  46,801
  49,005
  51,326
  53,771
  56,346
  59,055
  61,906
  64,905
  68,060
  71,377
  74,866
Adjusted assets (=assets-cash), $m
  21,592
  22,152
  22,781
  23,477
  24,240
  25,071
  25,969
  26,936
  27,974
  29,083
  30,267
  31,527
  32,866
  34,287
  35,792
  37,385
  39,070
  40,849
  42,728
  44,711
  46,801
  49,005
  51,326
  53,771
  56,346
  59,055
  61,906
  64,905
  68,060
  71,377
  74,866
Revenue / Adjusted assets
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
Average production assets, $m
  3,878
  3,964
  4,076
  4,201
  4,337
  4,486
  4,647
  4,820
  5,005
  5,204
  5,416
  5,641
  5,881
  6,135
  6,404
  6,689
  6,991
  7,309
  7,645
  8,000
  8,374
  8,768
  9,184
  9,621
  10,082
  10,567
  11,077
  11,613
  12,178
  12,771
  13,396
Working capital, $m
  1,468
  1,271
  1,307
  1,347
  1,391
  1,439
  1,490
  1,546
  1,605
  1,669
  1,737
  1,809
  1,886
  1,968
  2,054
  2,146
  2,242
  2,344
  2,452
  2,566
  2,686
  2,812
  2,946
  3,086
  3,234
  3,389
  3,553
  3,725
  3,906
  4,096
  4,297
Total debt, $m
  3,156
  2,697
  3,047
  3,435
  3,860
  4,322
  4,823
  5,361
  5,939
  6,558
  7,217
  7,919
  8,664
  9,456
  10,294
  11,181
  12,120
  13,111
  14,158
  15,262
  16,426
  17,654
  18,947
  20,309
  21,742
  23,252
  24,840
  26,510
  28,267
  30,115
  32,058
Total liabilities, $m
  12,798
  12,339
  12,689
  13,077
  13,502
  13,964
  14,465
  15,003
  15,581
  16,200
  16,859
  17,561
  18,306
  19,098
  19,936
  20,823
  21,762
  22,753
  23,800
  24,904
  26,068
  27,296
  28,589
  29,951
  31,384
  32,894
  34,482
  36,152
  37,909
  39,757
  41,700
Total equity, $m
  9,768
  9,813
  10,092
  10,400
  10,739
  11,106
  11,504
  11,933
  12,392
  12,884
  13,408
  13,967
  14,560
  15,189
  15,856
  16,562
  17,308
  18,096
  18,929
  19,807
  20,733
  21,709
  22,738
  23,821
  24,961
  26,161
  27,424
  28,753
  30,151
  31,620
  33,165
Total liabilities and equity, $m
  22,566
  22,152
  22,781
  23,477
  24,241
  25,070
  25,969
  26,936
  27,973
  29,084
  30,267
  31,528
  32,866
  34,287
  35,792
  37,385
  39,070
  40,849
  42,729
  44,711
  46,801
  49,005
  51,327
  53,772
  56,345
  59,055
  61,906
  64,905
  68,060
  71,377
  74,865
Debt-to-equity ratio
  0.323
  0.270
  0.300
  0.330
  0.360
  0.390
  0.420
  0.450
  0.480
  0.510
  0.540
  0.570
  0.600
  0.620
  0.650
  0.680
  0.700
  0.720
  0.750
  0.770
  0.790
  0.810
  0.830
  0.850
  0.870
  0.890
  0.910
  0.920
  0.940
  0.950
  0.970
Adjusted equity ratio
  0.436
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,031
  2,208
  2,269
  2,336
  2,409
  2,488
  2,574
  2,666
  2,766
  2,872
  2,984
  3,245
  3,373
  3,508
  3,652
  3,804
  3,964
  4,134
  4,313
  4,502
  4,701
  4,911
  5,132
  5,365
  5,610
  5,868
  6,140
  6,426
  6,726
  7,042
  7,374
Depreciation, amort., depletion, $m
  1,056
  955
  976
  1,000
  1,026
  1,055
  1,086
  1,119
  1,155
  1,193
  1,234
  1,085
  1,131
  1,180
  1,232
  1,286
  1,344
  1,406
  1,470
  1,538
  1,610
  1,686
  1,766
  1,850
  1,939
  2,032
  2,130
  2,233
  2,342
  2,456
  2,576
Funds from operations, $m
  3,467
  3,163
  3,245
  3,336
  3,435
  3,543
  3,660
  3,786
  3,920
  4,065
  4,218
  4,330
  4,504
  4,688
  4,883
  5,090
  5,309
  5,539
  5,783
  6,040
  6,311
  6,597
  6,898
  7,215
  7,549
  7,900
  8,270
  8,659
  9,068
  9,498
  9,950
Change in working capital, $m
  81
  32
  36
  40
  44
  48
  52
  56
  60
  64
  68
  72
  77
  82
  86
  91
  97
  102
  108
  114
  120
  126
  133
  140
  148
  155
  164
  172
  181
  190
  200
Cash from operations, $m
  3,386
  3,130
  3,209
  3,296
  3,391
  3,495
  3,608
  3,730
  3,861
  4,001
  4,150
  4,258
  4,427
  4,607
  4,797
  4,999
  5,212
  5,437
  5,675
  5,926
  6,191
  6,471
  6,765
  7,075
  7,401
  7,745
  8,106
  8,487
  8,887
  9,308
  9,750
Maintenance CAPEX, $m
  0
  -746
  -762
  -784
  -808
  -834
  -863
  -894
  -927
  -963
  -1,001
  -1,041
  -1,085
  -1,131
  -1,180
  -1,232
  -1,286
  -1,344
  -1,406
  -1,470
  -1,538
  -1,610
  -1,686
  -1,766
  -1,850
  -1,939
  -2,032
  -2,130
  -2,233
  -2,342
  -2,456
New CAPEX, $m
  -1,807
  -86
  -113
  -125
  -137
  -149
  -161
  -173
  -186
  -199
  -212
  -225
  -240
  -254
  -269
  -285
  -301
  -318
  -336
  -355
  -374
  -394
  -415
  -437
  -461
  -485
  -510
  -537
  -564
  -594
  -624
Cash from investing activities, $m
  -4,271
  -832
  -875
  -909
  -945
  -983
  -1,024
  -1,067
  -1,113
  -1,162
  -1,213
  -1,266
  -1,325
  -1,385
  -1,449
  -1,517
  -1,587
  -1,662
  -1,742
  -1,825
  -1,912
  -2,004
  -2,101
  -2,203
  -2,311
  -2,424
  -2,542
  -2,667
  -2,797
  -2,936
  -3,080
Free cash flow, $m
  -885
  2,299
  2,334
  2,387
  2,447
  2,513
  2,585
  2,663
  2,748
  2,840
  2,938
  2,991
  3,102
  3,221
  3,348
  3,482
  3,624
  3,774
  3,934
  4,102
  4,279
  4,466
  4,663
  4,871
  5,091
  5,321
  5,564
  5,820
  6,089
  6,372
  6,670
Issuance/(repayment) of debt, $m
  251
  303
  350
  388
  425
  462
  500
  539
  578
  618
  659
  702
  746
  791
  838
  887
  938
  991
  1,047
  1,104
  1,164
  1,227
  1,293
  1,362
  1,434
  1,509
  1,588
  1,671
  1,757
  1,848
  1,943
Issuance/(repurchase) of shares, $m
  -880
  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  
  -635
  303
  350
  388
  425
  462
  500
  539
  578
  618
  659
  702
  746
  791
  838
  887
  938
  991
  1,047
  1,104
  1,164
  1,227
  1,293
  1,362
  1,434
  1,509
  1,588
  1,671
  1,757
  1,848
  1,943
Total cash flow (excl. dividends), $m
  -1,504
  2,601
  2,684
  2,775
  2,872
  2,975
  3,085
  3,202
  3,326
  3,458
  3,597
  3,693
  3,848
  4,013
  4,186
  4,369
  4,562
  4,766
  4,980
  5,206
  5,443
  5,693
  5,956
  6,233
  6,524
  6,830
  7,152
  7,491
  7,846
  8,220
  8,613
Retained Cash Flow (-), $m
  -802
  -257
  -279
  -308
  -338
  -368
  -398
  -428
  -460
  -492
  -524
  -558
  -593
  -629
  -667
  -706
  -746
  -788
  -832
  -878
  -926
  -976
  -1,028
  -1,083
  -1,140
  -1,200
  -1,263
  -1,329
  -1,398
  -1,470
  -1,545
Prev. year cash balance distribution, $m
 
  212
  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
 
  2,556
  2,406
  2,467
  2,534
  2,607
  2,687
  2,774
  2,867
  2,966
  3,073
  3,134
  3,255
  3,383
  3,519
  3,664
  3,816
  3,977
  4,148
  4,328
  4,517
  4,717
  4,928
  5,150
  5,384
  5,630
  5,889
  6,162
  6,449
  6,750
  7,068
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
 
  2,451
  2,202
  2,147
  2,086
  2,021
  1,950
  1,874
  1,792
  1,704
  1,611
  1,488
  1,389
  1,286
  1,182
  1,076
  970
  865
  764
  666
  574
  488
  409
  338
  274
  219
  172
  132
  100
  74
  53
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

Magna International Inc. (Magna) is a global automotive supplier. The Company's segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company's product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.

FINANCIAL RATIOS  of  Magna International (MGA)

Valuation Ratios
P/E Ratio 10.5
Price to Sales 0.6
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 6.3
Price to Free Cash Flow 13.5
Growth Rates
Sales Growth Rate 13.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.6%
Cap. Spend. - 3 Yr. Gr. Rate 9.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 24.5%
Total Debt to Equity 32.3%
Interest Coverage 29
Management Effectiveness
Return On Assets 10%
Ret/ On Assets - 3 Yr. Avg. 10.5%
Return On Total Capital 16.6%
Ret/ On T. Cap. - 3 Yr. Avg. 18.2%
Return On Equity 21.7%
Return On Equity - 3 Yr. Avg. 21.7%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 14.6%
Gross Margin - 3 Yr. Avg. 14.4%
EBITDA Margin 10.8%
EBITDA Margin - 3 Yr. Avg. 10.6%
Operating Margin 7.6%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 7.6%
Pre-Tax Margin - 3 Yr. Avg. 7.8%
Net Profit Margin 5.6%
Net Profit Margin - 3 Yr. Avg. 5.8%
Effective Tax Rate 25.4%
Eff/ Tax Rate - 3 Yr. Avg. 26.1%
Payout Ratio 19%

MGA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MGA stock intrinsic value calculation we used $36445 million for the last fiscal year's total revenue generated by Magna International. The default revenue input number comes from 2016 income statement of Magna 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 MGA stock valuation model: a) initial revenue growth rate of 2.6% 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 4.3%, whose default value for MGA is calculated based on our internal credit rating of Magna 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 Magna 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 MGA stock the variable cost ratio is equal to 91.7%.

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 MGA 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 Magna International.

Corporate tax rate of 27% is the nominal tax rate for Magna 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 MGA 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 MGA are equal to 10.6%.

Life of production assets of 5.2 years is the average useful life of capital assets used in Magna 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 MGA is equal to 3.4%. 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 - $9768 million for Magna 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 367.575 million for Magna 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 Magna International at the current share price and the inputted number of shares is $20.5 billion.

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COMPANY NEWS

▶ Auto-Parts Suppliers Fear End of Nafta   [Nov-09-17 05:33PM  Bloomberg Video]
▶ Magna tops Street 3Q forecasts   [05:13AM  Associated Press]
▶ Magna Announces Third Quarter Results   [05:00AM  PR Newswire]
▶ Magna Expands Mirrors Capacity in Slovakia   [Oct-31-17 09:03AM  CNW Group]
▶ Magna Puts a New Twist on Welding   [Oct-26-17 09:00AM  PR Newswire]
▶ Magna Puts a New Twist on Welding   [09:00AM  CNW Group]
▶ This Just In: Magna International Stock Upgraded   [Oct-18-17 11:57AM  Motley Fool]
▶ Top Ranked Value Stocks to Buy for October 12th   [Oct-12-17 09:03AM  Zacks]
▶ 3 Value Stocks for Wise Investors   [06:02AM  Motley Fool]
▶ Magna Announces Settlement of KS Centoco Litigation   [Sep-29-17 05:19PM  CNW Group]
▶ Magna Announces Senior Notes Offering   [Sep-18-17 05:05PM  CNW Group]
▶ Cramer Remix: Why the auto slowdown thesis is kaput   [Sep-14-17 07:31PM  CNBC Videos]
▶ Autoliv Skyrockets On Autonomous-Driving Spinoff Plan   [04:02PM  Investor's Business Daily]
▶ 3 More Reasons to Like BlackBerry Ltd (BBRY) Stock   [Sep-12-17 09:15AM  InvestorPlace]
▶ Stocks Showing Improved Relative Strength: Magna International   [03:00AM  Investor's Business Daily]
▶ Experience 360 Degrees of Magna at IAA Frankfurt   [Sep-07-17 08:00AM  PR Newswire]
▶ Top Ranked Value Stocks to Buy for August 23rd   [Aug-23-17 10:21AM  Zacks]
▶ Magna gets construction permit in Hungary-report   [Aug-22-17 02:32AM  Reuters]
▶ Top Ranked Value Stocks to Buy for August 17th   [Aug-17-17 09:33AM  Zacks]
Financial statements of MGA
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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