Intrinsic value of Manning&Napier - MN

Previous Close

$1.75

  Intrinsic Value

$47.21

stock screener

  Rating & Target

str. buy

+999%

Previous close

$1.75

 
Intrinsic value

$47.21

 
Up/down potential

+999%

 
Rating

str. buy

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

We calculate the intrinsic value of MN 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 0001), $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 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  206
  210
  216
  222
  228
  236
  244
  253
  262
  272
  283
  294
  306
  319
  333
  348
  363
  380
  397
  415
  434
  455
  476
  499
  522
  547
  574
  601
  630
  661
Variable operating expenses, $m
  44
  45
  46
  47
  49
  50
  52
  54
  56
  58
  60
  62
  65
  67
  70
  73
  77
  80
  84
  87
  91
  96
  100
  105
  110
  115
  121
  127
  133
  139
Fixed operating expenses, $m
  111
  114
  116
  119
  122
  124
  127
  130
  133
  135
  138
  142
  145
  148
  151
  154
  158
  161
  165
  168
  172
  176
  180
  184
  188
  192
  196
  200
  205
  209
Total operating expenses, $m
  155
  159
  162
  166
  171
  174
  179
  184
  189
  193
  198
  204
  210
  215
  221
  227
  235
  241
  249
  255
  263
  272
  280
  289
  298
  307
  317
  327
  338
  348
Operating income, $m
  50
  52
  53
  56
  58
  61
  65
  69
  74
  79
  85
  91
  97
  104
  112
  120
  129
  138
  148
  159
  171
  183
  196
  210
  225
  240
  257
  274
  293
  312
EBITDA, $m
  52
  54
  55
  58
  60
  64
  67
  71
  76
  81
  87
  93
  99
  106
  114
  122
  131
  141
  151
  162
  174
  186
  199
  213
  228
  244
  260
  278
  297
  317
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
Earnings before tax, $m
  50
  52
  53
  55
  58
  61
  65
  69
  73
  78
  84
  90
  96
  103
  111
  119
  127
  136
  146
  157
  168
  180
  193
  207
  221
  236
  253
  270
  288
  307
Tax expense, $m
  14
  14
  14
  15
  16
  17
  17
  19
  20
  21
  23
  24
  26
  28
  30
  32
  34
  37
  40
  42
  45
  49
  52
  56
  60
  64
  68
  73
  78
  83
Net income, $m
  37
  38
  39
  41
  42
  45
  47
  50
  53
  57
  61
  66
  70
  75
  81
  87
  93
  100
  107
  115
  123
  132
  141
  151
  161
  172
  184
  197
  210
  224

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  102
  105
  108
  111
  114
  118
  122
  126
  131
  136
  141
  147
  153
  159
  166
  173
  181
  189
  198
  207
  217
  227
  237
  249
  260
  273
  286
  300
  314
  330
Adjusted assets (=assets-cash), $m
  102
  105
  108
  111
  114
  118
  122
  126
  131
  136
  141
  147
  153
  159
  166
  173
  181
  189
  198
  207
  217
  227
  237
  249
  260
  273
  286
  300
  314
  330
Revenue / Adjusted assets
  2.020
  2.000
  2.000
  2.000
  2.000
  2.000
  2.000
  2.008
  2.000
  2.000
  2.007
  2.000
  2.000
  2.006
  2.006
  2.012
  2.006
  2.011
  2.005
  2.005
  2.000
  2.004
  2.008
  2.004
  2.008
  2.004
  2.007
  2.003
  2.006
  2.003
Average production assets, $m
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
  22
  23
  25
  26
Working capital, $m
  -24
  -25
  -26
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -72
  -75
  -79
Total debt, $m
  1
  2
  3
  4
  6
  8
  9
  11
  13
  16
  18
  21
  23
  26
  29
  32
  36
  40
  43
  47
  52
  56
  61
  66
  71
  77
  83
  89
  95
  102
Total liabilities, $m
  46
  47
  48
  49
  51
  52
  54
  56
  58
  60
  63
  65
  68
  71
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  116
  122
  128
  134
  140
  147
Total equity, $m
  57
  58
  60
  61
  63
  65
  67
  70
  72
  75
  78
  81
  85
  88
  92
  96
  100
  105
  110
  115
  120
  126
  131
  138
  144
  151
  158
  166
  174
  183
Total liabilities and equity, $m
  103
  105
  108
  110
  114
  117
  121
  126
  130
  135
  141
  146
  153
  159
  166
  173
  181
  189
  198
  207
  217
  227
  237
  249
  260
  273
  286
  300
  314
  330
Debt-to-equity ratio
  0.010
  0.030
  0.050
  0.070
  0.090
  0.120
  0.140
  0.160
  0.180
  0.210
  0.230
  0.250
  0.270
  0.300
  0.320
  0.340
  0.360
  0.380
  0.400
  0.410
  0.430
  0.450
  0.460
  0.480
  0.490
  0.510
  0.520
  0.530
  0.550
  0.560
Adjusted equity ratio
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  37
  38
  39
  41
  42
  45
  47
  50
  53
  57
  61
  66
  70
  75
  81
  87
  93
  100
  107
  115
  123
  132
  141
  151
  161
  172
  184
  197
  210
  224
Depreciation, amort., depletion, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Funds from operations, $m
  39
  40
  41
  42
  44
  47
  49
  52
  56
  59
  63
  67
  72
  77
  83
  89
  95
  102
  109
  117
  126
  135
  144
  154
  165
  176
  188
  201
  214
  229
Change in working capital, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
Cash from operations, $m
  39
  40
  41
  43
  45
  48
  50
  53
  57
  60
  64
  69
  74
  79
  85
  91
  97
  104
  112
  119
  128
  137
  147
  157
  168
  179
  191
  204
  218
  232
Maintenance CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from investing activities, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Free cash flow, $m
  38
  39
  40
  42
  43
  46
  48
  51
  55
  58
  62
  67
  71
  76
  82
  88
  94
  101
  108
  116
  124
  133
  143
  153
  163
  175
  187
  199
  213
  227
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
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
Cash from financing (excl. dividends), $m  
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
Total cash flow (excl. dividends), $m
  39
  40
  41
  43
  45
  47
  50
  53
  57
  61
  65
  69
  74
  79
  85
  91
  98
  105
  112
  120
  129
  138
  147
  158
  169
  180
  192
  205
  219
  234
Retained Cash Flow (-), $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
Prev. year cash balance distribution, $m
  104
  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
  142
  38
  40
  41
  43
  45
  48
  51
  54
  58
  62
  66
  71
  76
  81
  87
  93
  100
  107
  115
  123
  132
  142
  152
  162
  173
  185
  198
  211
  225
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
  136
  35
  34
  34
  33
  33
  32
  32
  31
  30
  29
  28
  27
  25
  24
  22
  20
  18
  17
  15
  13
  11
  9
  8
  6
  5
  4
  3
  2
  2
Current shareholders' claim on cash, %
  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

Manning & Napier, Inc. is an independent investment management company. The Company operates through investment management industry segment. It provides a range of investment solutions through separately managed accounts, mutual funds and collective investment trust funds, as well as a range of consultative services. It offers equity, fixed income and alternative strategies, as well as a range of blended asset portfolios, such as life cycle funds. It serves a client base of high net worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans (Taft-Hartley), endowments and foundations. It offers its investment management capabilities through direct sales to high net worth individuals and institutions, as well as through third-party intermediaries, platforms and institutional investment consultants. Its investment management offerings include approximately 40 separate account composites, and over 60 mutual funds and collective investment trusts.

FINANCIAL RATIOS  of  Manning&Napier (MN)

Valuation Ratios
P/E Ratio 2.9
Price to Sales 0.1
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 0.3
Price to Free Cash Flow 0.3
Growth Rates
Sales Growth Rate -20.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
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 4%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 5.4%
Ret/ On T. Cap. - 3 Yr. Avg. 6.2%
Return On Equity 5.4%
Return On Equity - 3 Yr. Avg. 6.2%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 37.3%
EBITDA Margin - 3 Yr. Avg. 37.2%
Operating Margin 35.7%
Oper. Margin - 3 Yr. Avg. 36.4%
Pre-Tax Margin 36.5%
Pre-Tax Margin - 3 Yr. Avg. 36.6%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 9.9%
Eff/ Tax Rate - 3 Yr. Avg. 7.6%
Payout Ratio 111.1%

MN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MN stock intrinsic value calculation we used $201.527 million for the last fiscal year's total revenue generated by Manning&Napier. The default revenue input number comes from 0001 income statement of Manning&Napier. 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 MN stock valuation model: a) initial revenue growth rate of 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 4.3%, whose default value for MN is calculated based on our internal credit rating of Manning&Napier, 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 Manning&Napier.
    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 MN stock the variable cost ratio is equal to 21.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $109 million in the base year in the intrinsic value calculation for MN 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 5.4% for Manning&Napier.

Corporate tax rate of 27% is the nominal tax rate for Manning&Napier. 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 MN 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 MN are equal to 3.9%.

Life of production assets of 5.9 years is the average useful life of capital assets used in Manning&Napier 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 MN is equal to -11.9%. 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 - $160.281 million for Manning&Napier - 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 15.333 million for Manning&Napier 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 Manning&Napier at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Manning & Napier: 3Q Earnings Snapshot   [05:59PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Oct-25-18 03:32PM  PR Newswire]
▶ 5 High-Yielding Stocks   [Sep-14-18 04:16PM  GuruFocus.com]
▶ Manning & Napier: 2Q Earnings Snapshot   [05:47PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Jul-26-18 04:05PM  PR Newswire]
▶ June Fundamental Stock Pick: Manning & Napier Inc (NYSE:MN)   [Jun-20-18 11:57AM  Simply Wall St.]
▶ Cheap Financial Stocks This Week   [Jun-14-18 01:02PM  Simply Wall St.]
▶ Manning & Napier: 1Q Earnings Snapshot   [May-02-18 06:04PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Apr-26-18 04:05PM  PR Newswire]
▶ Before You Buy Manning & Napier Incs (NYSE:MN), Consider This   [Apr-24-18 03:30PM  Simply Wall St.]
▶ Discounted Financial Stocks To Buy Now   [Mar-29-18 01:02PM  Simply Wall St.]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Mar-08-18 04:05PM  PR Newswire]
▶ Top 3 Stocks To Buy   [06:02AM  Simply Wall St.]
▶ New Strong Sell Stocks for March 2nd   [Mar-02-18 06:00AM  Zacks]
▶ New Strong Sell Stocks for February 13th   [Feb-13-18 06:24AM  Zacks]
▶ Manning & Napier reports 4Q loss   [Feb-07-18 06:35PM  Associated Press]
▶ 5 Real Estate Stocks in Gurus' Portfolios   [Feb-01-18 02:43PM  GuruFocus.com]
▶ Manning & Napier posts 3Q profit   [Nov-01-17 05:41PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Oct-26-17 04:05PM  PR Newswire]
▶ Manning & Napier posts 2Q profit   [Aug-01-17 09:57PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Jul-27-17 04:05PM  PR Newswire]
▶ 4 Deep Value Net-Net Stocks   [Jul-05-17 03:31PM  GuruFocus.com]
▶ Manning & Napier posts 1Q profit   [May-03-17 06:08PM  Associated Press]
▶ Manning & Napier, Inc. Announces Quarterly Dividend   [Apr-27-17 04:05PM  PR Newswire]

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