Intrinsic value of Marine Products - MPX

Previous Close

$22.93

  Intrinsic Value

$38.74

stock screener

  Rating & Target

str. buy

+69%

Previous close

$22.93

 
Intrinsic value

$38.74

 
Up/down potential

+69%

 
Rating

str. buy

We calculate the intrinsic value of MPX 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 0.8

 

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, %
  21.70
  20.03
  18.53
  17.17
  15.96
  14.86
  13.88
  12.99
  12.19
  11.47
  10.82
  10.24
  9.72
  9.24
  8.82
  8.44
  8.09
  7.79
  7.51
  7.26
  7.03
  6.83
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
  5.87
  5.79
Revenue, $m
  325
  390
  463
  542
  629
  722
  823
  929
  1,043
  1,162
  1,288
  1,420
  1,558
  1,702
  1,852
  2,008
  2,171
  2,340
  2,516
  2,698
  2,888
  3,085
  3,290
  3,503
  3,725
  3,956
  4,196
  4,447
  4,708
  4,980
Variable operating expenses, $m
  245
  294
  348
  408
  473
  543
  619
  699
  784
  874
  968
  1,067
  1,171
  1,279
  1,392
  1,509
  1,632
  1,759
  1,891
  2,028
  2,170
  2,319
  2,473
  2,633
  2,800
  2,973
  3,154
  3,342
  3,538
  3,743
Fixed operating expenses, $m
  39
  40
  41
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  52
  53
  54
  55
  56
  57
  59
  60
  61
  63
  64
  65
  67
  68
  70
  71
  73
Total operating expenses, $m
  284
  334
  389
  449
  515
  586
  663
  744
  830
  921
  1,016
  1,116
  1,221
  1,331
  1,445
  1,563
  1,687
  1,815
  1,948
  2,087
  2,230
  2,380
  2,536
  2,697
  2,865
  3,040
  3,222
  3,412
  3,609
  3,816
Operating income, $m
  42
  57
  74
  93
  113
  136
  160
  185
  212
  241
  272
  303
  337
  371
  407
  445
  484
  525
  567
  612
  657
  705
  755
  806
  860
  916
  974
  1,035
  1,098
  1,164
EBITDA, $m
  44
  59
  77
  96
  117
  140
  164
  190
  218
  247
  278
  311
  345
  380
  417
  455
  495
  537
  580
  625
  672
  721
  771
  824
  879
  936
  996
  1,058
  1,122
  1,190
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  2
  2
  3
  4
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
Earnings before tax, $m
  42
  57
  73
  92
  112
  134
  157
  182
  209
  237
  267
  298
  330
  364
  400
  437
  475
  515
  556
  600
  644
  691
  740
  790
  843
  897
  954
  1,014
  1,076
  1,141
Tax expense, $m
  11
  15
  20
  25
  30
  36
  42
  49
  56
  64
  72
  80
  89
  98
  108
  118
  128
  139
  150
  162
  174
  187
  200
  213
  228
  242
  258
  274
  290
  308
Net income, $m
  30
  41
  54
  67
  82
  98
  115
  133
  152
  173
  195
  218
  241
  266
  292
  319
  347
  376
  406
  438
  470
  504
  540
  577
  615
  655
  697
  740
  785
  833

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
  117
  140
  166
  195
  226
  259
  295
  334
  375
  417
  463
  510
  560
  611
  665
  721
  780
  840
  904
  969
  1,037
  1,108
  1,182
  1,258
  1,338
  1,421
  1,507
  1,597
  1,691
  1,789
Adjusted assets (=assets-cash), $m
  117
  140
  166
  195
  226
  259
  295
  334
  375
  417
  463
  510
  560
  611
  665
  721
  780
  840
  904
  969
  1,037
  1,108
  1,182
  1,258
  1,338
  1,421
  1,507
  1,597
  1,691
  1,789
Revenue / Adjusted assets
  2.778
  2.786
  2.789
  2.779
  2.783
  2.788
  2.790
  2.781
  2.781
  2.787
  2.782
  2.784
  2.782
  2.786
  2.785
  2.785
  2.783
  2.786
  2.783
  2.784
  2.785
  2.784
  2.783
  2.785
  2.784
  2.784
  2.784
  2.785
  2.784
  2.784
Average production assets, $m
  19
  23
  27
  32
  37
  43
  49
  55
  62
  69
  76
  84
  92
  100
  109
  118
  128
  138
  148
  159
  170
  182
  194
  207
  220
  233
  248
  262
  278
  294
Working capital, $m
  30
  36
  43
  50
  58
  66
  76
  86
  96
  107
  118
  131
  143
  157
  170
  185
  200
  215
  231
  248
  266
  284
  303
  322
  343
  364
  386
  409
  433
  458
Total debt, $m
  6
  12
  19
  27
  36
  45
  55
  65
  76
  88
  100
  113
  127
  141
  156
  171
  187
  204
  221
  239
  258
  277
  297
  318
  340
  363
  387
  411
  437
  464
Total liabilities, $m
  32
  38
  46
  53
  62
  71
  81
  91
  103
  114
  127
  140
  153
  168
  182
  198
  214
  230
  248
  266
  284
  304
  324
  345
  367
  389
  413
  438
  463
  490
Total equity, $m
  85
  102
  121
  141
  164
  188
  214
  242
  272
  303
  336
  370
  406
  444
  483
  524
  566
  610
  656
  704
  753
  804
  858
  914
  971
  1,032
  1,094
  1,160
  1,228
  1,299
Total liabilities and equity, $m
  117
  140
  167
  194
  226
  259
  295
  333
  375
  417
  463
  510
  559
  612
  665
  722
  780
  840
  904
  970
  1,037
  1,108
  1,182
  1,259
  1,338
  1,421
  1,507
  1,598
  1,691
  1,789
Debt-to-equity ratio
  0.070
  0.120
  0.160
  0.190
  0.220
  0.240
  0.250
  0.270
  0.280
  0.290
  0.300
  0.310
  0.310
  0.320
  0.320
  0.330
  0.330
  0.330
  0.340
  0.340
  0.340
  0.340
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.360
  0.360
Adjusted equity ratio
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726
  0.726

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  30
  41
  54
  67
  82
  98
  115
  133
  152
  173
  195
  218
  241
  266
  292
  319
  347
  376
  406
  438
  470
  504
  540
  577
  615
  655
  697
  740
  785
  833
Depreciation, amort., depletion, $m
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
Funds from operations, $m
  32
  44
  56
  70
  85
  102
  119
  138
  158
  179
  201
  225
  249
  275
  301
  329
  358
  388
  419
  452
  485
  520
  557
  595
  634
  675
  718
  763
  810
  858
Change in working capital, $m
  5
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
Cash from operations, $m
  27
  38
  50
  63
  77
  93
  110
  128
  148
  168
  190
  213
  237
  261
  288
  315
  343
  372
  403
  435
  468
  502
  538
  575
  614
  654
  696
  740
  786
  833
Maintenance CAPEX, $m
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
New CAPEX, $m
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
Cash from investing activities, $m
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -10
  -12
  -12
  -13
  -15
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -34
  -37
  -38
  -40
Free cash flow, $m
  22
  32
  43
  56
  70
  84
  101
  118
  136
  156
  177
  198
  221
  245
  270
  296
  323
  351
  381
  411
  443
  476
  510
  546
  583
  621
  662
  704
  747
  793
Issuance/(repayment) of debt, $m
  6
  6
  7
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
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  
  6
  6
  7
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
Total cash flow (excl. dividends), $m
  28
  39
  51
  64
  78
  94
  110
  128
  147
  168
  189
  211
  235
  259
  285
  311
  339
  368
  398
  429
  461
  495
  530
  567
  605
  644
  685
  728
  773
  820
Retained Cash Flow (-), $m
  -15
  -17
  -19
  -21
  -23
  -24
  -26
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -49
  -51
  -53
  -56
  -58
  -60
  -63
  -65
  -68
  -71
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
  13
  22
  32
  43
  55
  69
  84
  101
  118
  137
  156
  177
  199
  222
  246
  271
  297
  324
  352
  381
  412
  444
  477
  511
  547
  584
  623
  663
  705
  749
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
  12
  20
  28
  35
  43
  50
  57
  63
  68
  72
  74
  75
  76
  74
  72
  69
  65
  60
  54
  48
  43
  37
  31
  26
  21
  17
  13
  10
  8
  6
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
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Marine Products Corporation manufactures fiberglass motorized boats distributed and marketed through its independent dealer network. The Company designs, manufactures and sells recreational fiberglass powerboats in the sportboat, deckboat, cruiser, jet boat and sport fishing markets. The Company's product offerings include Chaparral sterndrive, outboard and jet pleasure boats, and Robalo outboard sport fishing boats. The Company's product line includes Chaparral-Vortex Jet Boat; Chaparral-H2O Sport Series; Chaparral-SunCoast Outboard Deck Boat; Chaparral-SSi Wide Tech; Chaparral-SSX Sport Boat; Chaparral-Sunesta Sport Deck; Chaparral-Signature Cruiser; Robalo-Center Console; Robalo-Cayman Bay Boat, and Robalo-Dual Console Robalo-Walkaround. Its manufacturing facilities are located in Nashville and Valdosta in Georgia. The Chaparral - Vortex Jet Boats are fiberglass sterndrive pleasure boats marketed as jet-powered boats with traditional bowrider styling.

FINANCIAL RATIOS  of  Marine Products (MPX)

Valuation Ratios
P/E Ratio 47
Price to Sales 3.3
Price to Book 12.3
Price to Tangible Book
Price to Cash Flow 49.9
Price to Free Cash Flow 57.1
Growth Rates
Sales Growth Rate 16.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
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 17%
Ret/ On Assets - 3 Yr. Avg. 12.9%
Return On Total Capital 21.9%
Ret/ On T. Cap. - 3 Yr. Avg. 16.4%
Return On Equity 21.9%
Return On Equity - 3 Yr. Avg. 16.4%
Asset Turnover 2.4
Profitability Ratios
Gross Margin 20.7%
Gross Margin - 3 Yr. Avg. 20.4%
EBITDA Margin 10%
EBITDA Margin - 3 Yr. Avg. 9.6%
Operating Margin 9.5%
Oper. Margin - 3 Yr. Avg. 8.7%
Pre-Tax Margin 9.5%
Pre-Tax Margin - 3 Yr. Avg. 9.1%
Net Profit Margin 7.1%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 26.1%
Eff/ Tax Rate - 3 Yr. Avg. 30.1%
Payout Ratio 52.9%

MPX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MPX stock intrinsic value calculation we used $267.316 million for the last fiscal year's total revenue generated by Marine Products. The default revenue input number comes from 0001 income statement of Marine Products. 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 MPX stock valuation model: a) initial revenue growth rate of 21.7% 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 MPX is calculated based on our internal credit rating of Marine Products, 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 Marine Products.
    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 MPX stock the variable cost ratio is equal to 75.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $38 million in the base year in the intrinsic value calculation for MPX 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 Marine Products.

Corporate tax rate of 27% is the nominal tax rate for Marine Products. 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 MPX 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 MPX are equal to 5.9%.

Life of production assets of 11.5 years is the average useful life of capital assets used in Marine Products 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 MPX is equal to 9.2%. 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 - $69.604 million for Marine Products - 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 34.548 million for Marine Products 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 Marine Products at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ Marine Products: 3Q Earnings Snapshot   [06:54AM  Associated Press]
▶ Marine Products: 2Q Earnings Snapshot   [06:52AM  Associated Press]
▶ 5 Top Efficient Stocks to Keep on Your Radar   [May-25-18 09:57AM  Zacks]
▶ 5 Breakout Stocks Offering Extraordinary Returns   [May-24-18 10:00AM  InvestorPlace]
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▶ Marine Products: 1Q Earnings Snapshot   [Apr-25-18 06:41AM  Associated Press]
▶ Marine Products posts 4Q profit   [07:01AM  Associated Press]
▶ Marine Products posts 3Q profit   [06:59AM  Associated Press]
▶ Should You Sell Marine Products Corporation (MPX) At $16.93?   [Sep-29-17 09:27PM  Simply Wall St.]
▶ Marine Products posts 2Q profit   [Jul-26-17 08:55PM  Associated Press]
▶ What you need to know about Modi's India?   [Jun-28-17 05:21PM  Zacks]

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