Intrinsic value of Marine Products Corporation - MPX

Previous Close

$17.71

  Intrinsic Value

$10.23

stock screener

  Rating & Target

sell

-42%

Previous close

$17.71

 
Intrinsic value

$10.23

 
Up/down potential

-42%

 
Rating

sell

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 0.6

 

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
  305
  312
  320
  329
  339
  350
  362
  375
  389
  404
  420
  437
  455
  474
  494
  516
  539
  563
  589
  616
  644
  675
  706
  740
  775
  812
  851
  892
  935
  981
Variable operating expenses, $m
  247
  252
  259
  266
  274
  283
  293
  303
  314
  326
  339
  353
  367
  383
  399
  417
  435
  455
  476
  497
  521
  545
  570
  597
  626
  656
  687
  721
  755
  792
Fixed operating expenses, $m
  21
  22
  22
  23
  23
  24
  24
  25
  26
  26
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
  35
  36
  37
  38
  39
  39
  40
Total operating expenses, $m
  268
  274
  281
  289
  297
  307
  317
  328
  340
  352
  366
  380
  395
  411
  428
  447
  465
  486
  508
  529
  554
  579
  605
  632
  662
  693
  725
  760
  794
  832
Operating income, $m
  37
  38
  39
  40
  41
  43
  45
  47
  49
  51
  54
  57
  60
  63
  66
  70
  73
  77
  82
  86
  91
  96
  101
  107
  113
  119
  126
  133
  140
  148
EBITDA, $m
  39
  40
  41
  42
  44
  45
  47
  49
  51
  54
  56
  59
  62
  65
  69
  72
  76
  80
  85
  89
  94
  99
  105
  111
  117
  124
  130
  138
  145
  154
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
Earnings before tax, $m
  37
  38
  39
  40
  41
  43
  45
  46
  48
  51
  54
  56
  59
  62
  65
  69
  72
  76
  80
  85
  89
  94
  99
  105
  111
  117
  124
  130
  138
  145
Tax expense, $m
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  30
  32
  33
  35
  37
  39
Net income, $m
  27
  27
  28
  29
  30
  31
  32
  34
  35
  37
  39
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  69
  73
  77
  81
  85
  90
  95
  101
  106

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
  103
  105
  108
  111
  114
  118
  122
  126
  131
  136
  142
  147
  153
  160
  167
  174
  182
  190
  199
  208
  217
  228
  238
  250
  261
  274
  287
  301
  316
  331
Adjusted assets (=assets-cash), $m
  103
  105
  108
  111
  114
  118
  122
  126
  131
  136
  142
  147
  153
  160
  167
  174
  182
  190
  199
  208
  217
  228
  238
  250
  261
  274
  287
  301
  316
  331
Revenue / Adjusted assets
  2.961
  2.971
  2.963
  2.964
  2.974
  2.966
  2.967
  2.976
  2.969
  2.971
  2.958
  2.973
  2.974
  2.963
  2.958
  2.966
  2.962
  2.963
  2.960
  2.962
  2.968
  2.961
  2.966
  2.960
  2.969
  2.964
  2.965
  2.963
  2.959
  2.964
Average production assets, $m
  16
  17
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  51
  53
Working capital, $m
  35
  36
  37
  38
  39
  41
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  63
  65
  68
  71
  75
  78
  82
  86
  90
  94
  99
  103
  109
  114
Total debt, $m
  0
  1
  2
  3
  3
  4
  5
  6
  8
  9
  10
  12
  13
  15
  17
  19
  21
  23
  25
  27
  30
  32
  35
  38
  41
  44
  47
  51
  54
  58
Total liabilities, $m
  26
  27
  27
  28
  29
  30
  31
  32
  33
  35
  36
  37
  39
  41
  42
  44
  46
  48
  50
  53
  55
  58
  61
  63
  66
  70
  73
  76
  80
  84
Total equity, $m
  77
  79
  81
  83
  85
  88
  91
  94
  98
  102
  106
  110
  114
  119
  124
  130
  136
  142
  148
  155
  162
  170
  178
  186
  195
  204
  214
  225
  235
  247
Total liabilities and equity, $m
  103
  106
  108
  111
  114
  118
  122
  126
  131
  137
  142
  147
  153
  160
  166
  174
  182
  190
  198
  208
  217
  228
  239
  249
  261
  274
  287
  301
  315
  331
Debt-to-equity ratio
  0.010
  0.010
  0.020
  0.030
  0.040
  0.050
  0.060
  0.070
  0.080
  0.090
  0.100
  0.110
  0.120
  0.130
  0.130
  0.140
  0.150
  0.160
  0.170
  0.170
  0.180
  0.190
  0.200
  0.200
  0.210
  0.210
  0.220
  0.230
  0.230
  0.240
Adjusted equity ratio
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746
  0.746

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  27
  27
  28
  29
  30
  31
  32
  34
  35
  37
  39
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  69
  73
  77
  81
  85
  90
  95
  101
  106
Depreciation, amort., depletion, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
Funds from operations, $m
  29
  30
  30
  31
  32
  34
  35
  36
  38
  40
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  69
  72
  76
  81
  85
  90
  95
  100
  106
  111
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
Cash from operations, $m
  28
  29
  29
  30
  31
  32
  33
  35
  36
  38
  39
  41
  43
  46
  48
  50
  53
  56
  59
  62
  65
  69
  73
  77
  81
  86
  90
  95
  101
  106
Maintenance CAPEX, $m
  -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
  -5
  -5
  -5
New CAPEX, $m
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Cash from investing activities, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
Free cash flow, $m
  26
  27
  27
  28
  29
  30
  31
  32
  33
  35
  36
  38
  40
  42
  44
  47
  49
  52
  54
  57
  61
  64
  67
  71
  75
  79
  84
  88
  93
  99
Issuance/(repayment) of debt, $m
  0
  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
  4
  4
  4
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  
  0
  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
  4
  4
  4
Total cash flow (excl. dividends), $m
  27
  27
  28
  29
  30
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  51
  54
  57
  60
  63
  66
  70
  74
  78
  82
  87
  92
  97
  103
Retained Cash Flow (-), $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
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
  25
  26
  26
  27
  27
  28
  29
  30
  31
  32
  34
  35
  37
  39
  41
  43
  45
  48
  50
  53
  56
  59
  62
  66
  69
  73
  77
  82
  86
  91
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
  23
  23
  22
  21
  20
  20
  19
  18
  17
  16
  15
  14
  13
  12
  11
  10
  9
  8
  7
  6
  5
  4
  3
  3
  2
  2
  1
  1
  1
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

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 Corporation (MPX)

Valuation Ratios
P/E Ratio 36.3
Price to Sales 2.6
Price to Book 9.5
Price to Tangible Book
Price to Cash Flow 38.6
Price to Free Cash Flow 44.1
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 $299 million for the last fiscal year's total revenue generated by Marine Products Corporation. The default revenue input number comes from 0001 income statement of Marine Products Corporation. 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 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 MPX is calculated based on our internal credit rating of Marine Products Corporation, 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 Corporation.
    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 80.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21 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 Corporation.

Corporate tax rate of 27% is the nominal tax rate for Marine Products Corporation. 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 5.4%.

Life of production assets of 10 years is the average useful life of capital assets used in Marine Products Corporation 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 11.6%. 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 - $75.212 million for Marine Products Corporation - 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 34.195 million for Marine Products Corporation 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 Corporation at the current share price and the inputted number of shares is $0.6 billion.

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